Spot on consensus of 2.4% and same as in May

May sa M3: +2.9% y/y
M3 sa 3-mo avg: +2.8% y/y
SA private loans: -0.1% y/y

MNI survey medians:

May sa M3: +2.3% y/y
M3 sa 3-mo avg: +2.6% y/y
SA private loans: +0.0% y/y

MNI survey ranges:

May sa M3: +1.8% to +2.7% y/y
M3 sa 3-mo avg: +2.5% to +2.7% y/y
SA private loans: +0.0% to +0.3% y/y

April sa M3: +2.5% y/y
M3 sa 3-mo avg: +2.7% y/y
SA private loans: +0.3% y/y
–

FRANKFURT (MNI) – Private sector lending in the Eurozone declined
in May, adding to concerns over credit constraints, while M3 broad money
supply growth surprised to the upside, the European Central Bank
reported on Friday.

After inching up 0.3% on the year in April, private sector loans in
May were 0.1% below the previous-year level. Overall private sector
credit was down 0.2% on the year after a flat reading in April. Adjusted
for sales and securitisation, loans rose by 0.4% on the year after a
steady 0.8% gain in April.

Loans to non-financial corporations rose by 0.1.% on the year after
+0.4% (revised down from +0.5%) in April. On the month, lending fell
back E10 billion after a E7 billion recovery in April.

Consumer loans increased by 0.3% on the year, down 0.2 percentage
point from April’s rate, with lending for house purchases, the most
important component, up 0.7% over the same period compared to +1.0%
previously.

ECB President Mario Draghi continues to argue that the central
bank’s two three-year long-term refinancing operations should help
alleviate funding pressures on business, though the full impact will
take some time to be felt.

However, concern over banks’ ability to provide credit to the real
economy in the Eurozone’s periphery was highlighted last week when the
Governing Council decided to once again loosen collateral rules for its
refinancing operations by lowering rating thresholds for certain
asset-backed securities.

The new rules should help “to improve the access of the banking
sector to Eurosystem operations in order to further support the
provision of credit to households and non-financial corporations,” the
ECB explained.

The ECB may yet have to announce further changes, as even solvent
banks are running out of eligible collateral as the debt crisis hits
their bonds holdings and deposits. According to media reports, future
steps could include the ECB dropping its reliance on external rating
agencies when determining haircuts on government bonds.

The central bank will likely also closely watch results of the
upcoming bank lending survey on July 25 to gauge the effects of its
ultra-long tenders on lending.

The broad money (M3) supply rose by 2.9% on the year in May,
outpacing analysts’ expectations, bringing the three-month moving
average up slightly to +2.8%, still well below the ECB’s price-stability
guideline of +4.5%.

Narrow money (M1) was up by 3.3%, while short-term deposits other
than overnight deposits slowed to a growth rate of 2.3%, down from 3.3%
in April. Over the same period, marketable instruments increased to a
rate of +3.4%.

–Frankfurt newsroom +49 69 720 142; e-mail:frankfurt@marketnews.com

[TOPICS: M$$EC$,M$X$$$,M$XDS$,MT$$$$]

Der Spiegel

Not helped by EUR/JPY hitting a wall of offers into 100.50 and Europe’s lack of follow through this morning. Uncertainty continues to weigh  on the EUR/USD  and EUR/JPY’s since slipped back under 100.00, as EUR/USD heads down towards reported sell stops through 1.2550.

EUR/JPY sell stops are in place on a break down of 99.50.  USD/JPY has good bids down at 79.00/20, reportedly semi-official, with sell stops below. Offers are in place from 79.70/00 which includes the 55 day MA at 79.81

USD’s at 79.56 with the cross around 99.55

FRANKFURT (MNI) – German Chancellor Angela Merkel said Friday that
EU leaders had agreed “precise conditions” under which to allow bond
buys by the EU’s rescue funds and which would be monitored by the
so-called “Troika.”

The conditions would be attached “if Spain or Italy for example”
were to require such a bond-buying program to lower their yields. Merkel
said the deal means the principle of aid only with conditions – “no
performance without counter-performance” – remained intact.

Merkel also said it was clear that any possible future bank
recapitalisation program through the rescue funds would also include
conditions.

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

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

EUR/USD sits at 1.2560.

What’ll we see first 1.2450 or 1.2650?

Reasoning/s for choice always welcome, but not obligatory

• Joint banking supervision shouldn’t be housed with ECB
• Banking supervision not compatible with ECB mandate

Dow Jones reporting.

• Conditionality applies to aid from bailout funds
• ECB will play a role in bank supervision
• Broad philosophy remains in place on aid
• Aid is still attached to conditions

The key word here is……..”Conditionality”

EUR/USD sits at 1.2565 as the European market takes a somewhat cautious approach to overnight developments.

Could be a few more after today

BERLIN (MNI) – There will be more than 12,000 legal challenges
launched in the German Constitutional Court against Europe’s permanent
bailout fund ESM and the EU fiscal compact once the bills are approved
by both houses of the German parliament later on Friday, German daily
Sueddeutsche Zeitung reported today.

Among the plaintiffs will be parliamentarians from the
post-communist Left party, as well as the former Justice Minister Herta
Daeubler-Gmelin from the center-left SPD opposition party.

German President Joachim Gauck announced last week that he planned
to delay signing the ESM and fiscal compact bills. The Constitutional
Court had asked him to wait until it had decided on requests for
preliminary injunctions that have been filed against the two bills,
Gauck said.

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

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

• Irish Deputy PM says EU deal on direct bank recapitalisations is a “major game changer” for Ireland
• EU bank deal will help bring Irish debt to GDP ratio lower, enable faster recovery
• EU bank deal significantly improves chances of Ireland avoiding a second bailout

Elsewhere

• EU’s Almunia says Spain, Italy win together in EU deal
• Post summit statement is very positive

Up from a revised 0.80 in May and market forecasts of  0.78.

Bit rosier prediction for the next 6 mths, and won’t alleviate any pressure on the SNB efforts to weaken the franc

EUR/USD:  Bids 1.2550/60 sell stops below ahead of bids 1.2500/10. Offers 1.2630/50

GBP/USD:   Offers 1.5640/60, likely buy stops above, ahead of larger offers 1.5725/35 and 200 day MA at 1.5750. Bids 1.5600/10, tech supp 1.5570/80

EUR/GBP:  Offers 0.8080/90, Bids 0.8030/35, tech supp 0.8010/15 (o/n lows) ahead of bids 0.7990/00, barriers below at 0.79.50 and 79.00, large sell stops through both

USD/JPY:   Offers from 79.80/00 from exporters, sovereigns, CTA's. Bids from 79.20 layered down to 79.00 (rumoured semi-official), sell stops through 79.00 ahead of bids 78.65/75.

EUR/JPY:  Bids 99.65/75, sell stops through 99.50, offers 100.20/30 and 100.50/60, larger up at 101.00/10

AUD/JPY:  Tech supp 80.22 (55 day MA), Bids 79.35/45, Offers 81.00/10 and tech res 81.50/60

EUR/CHF: Bids 1.2000/10(SNB), Offers 1.2025/50 buy stops through 1.2055

AUD/USD:   Bids 1.0125/35, 1.0050/60(1.0055 – 55 day MA). Offers /tech res 1.0215/25 (1.0225 June 20 high), tech res above 1.0245/50 (200 day MA 1.0248) , buy stops above

EUR/AUD:  Offers 1.2420/40, Tech supp 1.2320/25 and larger at 1.2280/85 (March 5 lows),

NZD/USD:  Tech support 200 day MA at 0.7945, offers 0.7990/00 and 0.8010/20

FRANCE DATA: May PPI -1.0% m/m, +2.2% y/y; April: flat m/m, +2.7% y/y
- Manufacturing PPI -0.7% m/m, +1.8% y/y
- Oil product prices -5.3% m/m, +8.7% y/y
- Food and tobacco prices +0.1% m/m, +1.9% y/y
- Industry import prices -1.2% m/m, +2.8% y/y

FRANCE DATA: May sa consumer spending on goods +0.4% m/m, +0.6% y/y
– Above most analysts’ forecasts; MNI survey median forecast: flat m/m
– April-May consumer spending -0.2% vs 1Q average; 1Q flat q/q
– April goods spending revised to +0.7% m/m from +0.6% m/m
– See MNI MainWire for details

Stronger than  median forecasts of flat, +0.1% respectively.

French May producer prices -1.0% m/m +2.2% y/y, weaker than median forecasts -0.6%. +2.6% respectively.

As with German retail sales earlier, this data will have negligible effect on markets. (make that no effect)

Italian 10 year govt bond yield 5.905%, off 29 bps

Ladies and gentlemen we have us a sceptic

First Barclays then these two,… and HSBC execs are also being investigated…

All looking very messy for the UK clearers

More in the UK’s Telegraph

Real, seasonally adjusted retail sales:

May: -0.3% m/m, -1.1% y/y

MNI survey median: +0.3% m/m, +1.6% y/y
MNI survey range: flat to +0.4% m/m

April: -0.2% m/m, -4.3% y/y
-

FRANKFURT (MNI) – Retail sales in Germany fell in May for the
fourth time in five months, undershooting even the most pessimistic
forecasts, the Federal Statistical Office reported on Friday.

Deepening April’s decline, real, seasonally and calender-adjusted
sales fell 0.3% on the month and were down 1.1% on the year. Taking the
average over both April and May, sales were up 0.7% compared to the
first quarter average.

In unadjusted terms, turnover managed a modest 0.1% recovery after
falling 0.6% in May, leaving sales 1.0% higher on the year.

Food, drink and tobacco sales, for which only annual comparisons
are available, were up 0.1% in real terms, while non-food sales fell
1.7%.

Retailers polled in Markit Economics’ latest PMI survey reported a
jump in turnover this month, boosting the PMI figure (52.4) to a
three-month high. However, June’s results had failed to meet
expectations, while retailers were pessimistic regarding July, the PMI
report added.

“June data painted a somewhat mixed picture of the German retail
sector, as sales rose since last month but confidence in the outlook
dropped to its lowest since December 2009,” said Markit senior economist
Tim Moore.

A European Commission survey was somewhat less pessimistic, as
retailers’ business outlook improved slightly in June after hitting a
27-month low in May. Nevertheless, an above-average proportion of
retailers are not optimistic regarding the coming months.

Germans’ willingness to spend continued to increase in June, the
GfK Group said, lifting overall consumer confidence modestly.

With inflationary pressures easing, favourable wage negotiations
and record employment levels, private consumption should remain a
primary growth driver for the remainder of the year.

Supporting this assessment, the Ifo institute’s latest forecasts
project German consumption growth to slow by only 0.1 percentage point
this year to +1.3% before picking up speed to +1.5% in 2013.

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

[TOPICS: MTABLE,M$G$$$,M$X$$$,MAGDS$,M$XDS$,MT$$$$,MTABLE]