Raised 8.432 bln out of target of 7-8.5 bln euros.

For the 1000NY/1400GMT cut…

EUR/USD: 1.2575, 1.2600, 1.2650, 1.2700, 1.2750, 1.2800

USD/JPY: 78.50, 79.00, 79.30, 79.70

EUR/JPY; 100.30, 101.00

EUR/GBP: 0.7970, 0.8020

GBP/USD: 1.5650, 1.5690

AUD/USD: 1.0100, 1.0200

USD/CHF: 0.9400

Spain raised 2.22 bln euros in this mornings’ auctions. Target had been 1-2 bln, so that’s good.

Strong cover as well, although on the negative side they did have to pay up for their funds.

EUR/USD touch firmer at 1.2665 in wake of results.

Spain 2014 bond average yield 4.706% from 2.069% at last auction

Spain 2015 bond average yield 5.547% from 4.876% at last auction

Spain 2017 bond average yield 6.072% from 4.960% at last auction

-May Retail Sales +1.4% m/m; +2.4% y/y; median +1.1% m/m; +2.4% y/y
-May Retail Sales ex fuel 0.9% m/m; 3% y/y; median +1.0% m/m; +2.4% y/y

LONDON (MNI) – Retail sales bounced back strongly in May following
the April washout, leaving underlying sales performing reasonably
strongly, figures released by National Statistics Thursday.

In spite of the economic gloom stories, retail volumes continue to
grow at a moderate pace on a trend basis. While headline sales in Q2
look likely to fall, sales excluding fuel could turn out positive over
the quarter.

The data won’t alter the short-term outlook for monetary policy
with most economists now suggesting the Bank of England will add another
Stg50 billion in Quantitative Easing at the July Monetary Policy
Committee meeting.

Total retail sales rose 1.4% on the month in May and were up 2.4%
on the year. This was above the median for a 1.1% monthly gain but in
line with the median for the yearly increase.

The sharp rise should be seen in the context of a large weather
related fall in April, where volumes were down a revised 2.4% on the
month.

Excluding automative fuel, sales rose 0.9% on the month and were up
3% on the year, a little below the median of 1% on the month but above
the median for a 2.4% annual rise.

Sales at clothing and footwear stores rose 3.4% on the month in
May, following a 5.5% monthly drop in April. There was also a positive
addition from department store sales which were up 0.8% on the month,
household goods which rose 0.7% and other stores where volumes rose
0.2%.

Overall, non-food sales volumes were up 1.3% between April and May,
while sales at predominantly food stores rose just 0.2%.

On a trend basis, headline sales were up a lacklustre 0.5% in the
three months to May compared with the previous three months. Excluding
auto-fuel, however, volumes were up a decent 0.9%. Looking ahead to Q2,
headline sales would fall on the quarter even if volumes rose strongly
in June. Ex-fuel, though would see a 0.4% quarterly gain even if volumes
were flat during the month.

While retail volume growth remains reasonable, stores are still
having to discount heavily to sell stock. The overall retail sales
deflator fell to 0.9% on the year in May, the lowest since October 2009.
Ex-fuel the deflator was the lowest since February 2010.

The period for this survey was April 29 to May 26 and therefore did
not cover the Jubilee celebrations. National Statistics said there was
no evidence of any Jubilee effect, which will instead show up in the
June data.

-London bureau: +44 20 7862 7491; email: puglow@marketnews.com

[TOPICS: MT$$$$,M$B$$$,MABDS$]

UK DATA: May Retail Sales +1.4% m/m; +2.4% y/y; median 1.1% m/m;2.4% y/y
-May Retail Sales ex fuel 0.9% m/m; 3% y/y; median +1.0% m/m; +2.4% y/y
————————————————————————
Retail sales bounced back shraply in May following the poor April
weather, leaving underlying sales performing reasonably strongly.
Headline sales came in above median m/m while ex fuel sales were a
little below. The largest rise came from clothing and footwear where
volumes rose 3.4% m/m following the weather related 5.5% drop in April.
Overall, non-food sales volumes were up 1.3% between April and May,
while sales at predominantly food stores rose just 0.2%. The data don’t
alter the short-term outlook for monetary policy with most economists
now suggesting the Bank of England will add another Stg50 billion in
Quantitative Easing at the July Monetary Policy Committee meeting.

A lot better than expected and giving cable a lift up to 1.5700 from around 1.5680.

Clothes and shoes purchases (and probably umbrellas) helping the strong bounce .

May retails sales  exfuel +0.9% m/m, +3.0% y/y (expected +0.7% m/m, +3.0% y/y)

Oh dear

• Greece is not able to fulfill its obligations towards EU, IMF
• Spain, Italy debt should be partly written down, restructured

–Adds Plans By Left Party To Stop Fiscal Pact In Constitutional Court

BERLIN (MNI) – German Chancellor Angela Merkel’s CDU/CSU-FDP
government coalition and the main opposition parties will be able to
reach a compromise on the ratification of the EU fiscal compact by the
end of the week, CDU/CSU parliamentary leader Volker Kauder told German
ARD public television on Thursday.

Negotiations with the opposition will continue today and on
Saturday but only a few points remain open, Kauder said. Thus, the EU
fiscal compact together with the permanent European bailout fund ESM can
be passed in parliament on June 29 as planned, he asserted: “This will
work out.”

Since ratification of the fiscal compact in Germany requires a
two-thirds majority, Merkel needs support from the opposition.

The opposition is demanding that the government lobby for a
financial transaction tax at the European level and that measures to
boost growth be decided along with the fiscal compact.

Thomas Oppermann, the parliamentary whip of the SPD, the largest
opposition party, told ARD on Thursday that he was “cautiously
optimistic” for today’s talks “I see a chance for an agreement and think
the breakthrough could come today.”

Kauder said, though, that the opposition demand for a joint debt
redemption fund in the Eurozone had been turned down given that it would
violate EU rules.

The concept of the fund was devised last year by the government’s
council of independent economic advisers, the so called “wise men.” It
envisions the Eurozone states pooling the portion of their public debts
above 60% of GDP and refinancing this through joint eurobonds while
agreeing on fixed debt repayment plans.

Meanwhile, the German daily Frankfurter Rundschau reported Thursday
that the parliamentary group of the post-communist Left party plans to
stop the fiscal compact with an expedited motion to the Constitutional
Court.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$X$$$,MGX$$$,M$$CR$,M$G$$$,MT$$$$]

Decline in Dutch house prices accelerated in May.

Prices of existing homes fell by 5.5% year on year, the steepest drop in nearly three years.

Dutch house prices have now fallen around 15% since their peak in 2008.

EMU DATA: April direct+portfolio outflow E14.8bn; March outflow E32.5bn
– EMU April direct invest outflow E6.0bn; March outflow E18.1bn
– EMU April portfolio invest outflow E8.8bn; March outflow E14.4bn
– EMU April equity invest outflow E24.9bn; March inflow E13.3bn
– EMU April bond/note invest inflow E2.8bn; March outflow E20.0bn
– EMU April money mkt invest inflow E13.3bn; March outflow E7.8bn
– EMU April sa current acct +E4.6bn; March +E10.3bn (+E9.1bn)
– EMU April sa goods trade bal.+E7.5bn; March +E8.7bn (+E8.6bn)
– EMU April nsa current acct +E1.6bn; March +E8.7bn (+E7.5bn)
– See MNI MainWire for details

Unchanged from  May, but still lowest since Jun 2009

EUR/USD down at 1.2645, the single currency underminned by the weaker than expected German PMI.

Also getting reports that the BIS has been selling again in recent trade, helping grease the wheels. They were sellers yesterday up around 1.2705.

Sell stops gathered down through 1.2635, basically in the  1.2630/35 area.

Unchanged from April.

Does anyone care?………..not really

Down from 45.2 in May and weaker than Reuters’ median forecast of 45.2

Services PMI 50.3, down from 51.8 in May and weaker than Reuters’ median forecast of 51.5.

Zerohedge

All rather slow going but seems demand is apparently fairly robust towards 1.0150 now with macro funds reportedly  buying down there.

Offers are now appearing  in the 1.0170′s and up at 1.0200/10

AUD’s sitting around 1.0165

• GS commitment to the euro is “total”, hard work is needed to keep Greece in
• But doesn’t mean that Greece won’t leave the euro
• Tightening of financial rules ” may go too far”,…. need to meet in the middle

Speaking from an International Economic forum in St Petersburg

Up from final 44.7 in May and better than Reuters’ median forecast of 44.5

Services PMI up at 47.3 from 45.1 in May and better than Reuters’ median forecast of 45.0.

EUR/USD recovers to 1.2680.

Could be a loooooong old morning

US August  WTI is down again this morning touching around $80.10 (8 month lows) following the FOMC, and EIA inventory data yesterday which pointed to oversupply and falling demand with a  rise in US stockpiles of  2.9 million barrels against market expectations of a draw of around 1.1 mmbls.

The move has since been further extended following the  report that Chinese manufacturing output is likely to contract this month.

Analysts now see some psychological support around the $80 level;  the August contract currently trades around $80.45

 Any chance of seeing something reflected in pump prices……..fat chance i think!?

FRANKFURT (MNI) – Cyprus plans to ask for its own EFSF bailout next
week, which would make it the fifth Eurozone country to seek outside
aid, German business daily Handelsblatt reported Thursday, citing a
diplomatic source.

The funds will be aimed at bailing out Cyprus’ banking sector, the
paper reported. However, a separate report in Germany’s Frankfurter
Allgemeine Zeitung said it was not yet clear whether the loan will be
limited to recapitalizing Cypriot banks, or will constitute a full-blown
government bailout program.

Neither paper cited the exact amount of funds Cyprus needs, though
FAZ said the request was expected to be for less than E10 billion. The
plans come as Spain is expected to make its own formal request for a
bank bailout of up to E100 billion at a meeting of Eurozone finance
ministers later Thursday.

–Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com

[TOPICS: M$G$$$,M$X$$$,MGX$$$,M$$CR$]