Brainstorming Friday - part 1

1. After Iran declared they want to divest 45 bil Euro and the official China denial the real Chinese business walks away from Euro billing things are at the edge but that is always the gloomy picture at lows. even the FED needs to intervene at these levels at it will hurt american business as stock markets are reflecting already with core EU countries outperforming US stocks especially Germany.

excerpt

Europe Tremors Resume: Spain Bund Spreads At All Time Wides, China Exporters Ditch Euro As CHF Surges

Submitted by Tyler Durden on 06/04/2010 14:51 +0300

Another horrendous day shaping up for Europe. Spanish Bund spreads have surged to all time highs just south of 200 bps, Hungary confirms that it was not exaggerating comments about chances of (not) avoiding Greek situation, pushing its CDS even wider, the EURCHF has dropped to under 1.40 and the SNB has not intervened yet, while the EURUSD is down to 4 year lows below 1.21. The nail in the euro coffin is a report by Reuters that a growing number of Chinese exporters turn down euro payment, flatly refuting anything SAFE may be saying officially.

Chinese exporters who made a big push only a year ago to bill in euros are increasingly turning their backs on the wounded European currency and demanding dollars instead.

By contrst, Beijing last week said a report it was reviewing the euro portion in its mountain of foreign exchange reserves was groundless and it calmed markets by saying that Europe remained a key investment market.

But Chinese exporters and the local governments that oversee them are less confident. They are trying to keep a wider berth from the euro, at least for now.

Oh, and now the French PM is quoted as saying that he only sees good news in parity between the dollar and the euro. Too bad none of his bank share the sentiment realizing all too well none of them will exist in that situation.

2. The NFP number will come in strong after Obama took the liberty to make a call on it the average expectation is 540k, Goldman calls for 600k and we can expect it to be at or above 600k as it will be cooked by many factors from birth death to consensus workers.