Sunday, May 09, 2010

Euro Summary and Futures

by Bill McBride on 5/09/2010 11:53:00 PM

Just a summary ... Europe and futures.

1) The EU created a €60 billion fund based on article 122 (special circumstances). The IMF will add €30 billion. Press conference archive here (40 minutes)

2) The EU will create a Special Purpose Vehicle (SPV) for 3 years based on inter government agreements. These are potential loan guarantees backed by all Euro Zone countries. This is in addition to €60 billion and will be up to €440 billion - plus a contribution from the IMF up to half of European Union contribution (up to €220 billion). The total of the two is €750 billion.

3) There are apparently agreements from Portugal and Spain to take steps to reduce their deficits.

4) The European Central Bank (ECB) announced "interventions in the euro area public and private debt securities markets (Securities Markets Programme) to ensure depth and liquidity in those market segments which are dysfunctional."

5) The Federal Reserve reopened swap lines to provide dollar liquidity.

Story Links:
From the NY Times: E.U. Details $957 Billion Rescue Package
From the WSJ: World Races to Avert Crisis in Europe
From Bloomberg: EU Crafts $962 Billion Show of Force to Halt Euro Crisis

Futures:
From CNBC, the Dow is up 225 and the S&P 500 is up about 30 points.
Asia is mostly up, the Nikkei is up 1.3% and the Shanghai Composite is off slightly.

And buried in the news, here is the weekly summary and a look ahead (with plenty of graphs).