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| Eurozone crisis live: Greece poised to form coalition | Eurozone crisis live: Greece poised to form coalition |
| (31 minutes later) | |
| 9.49am: General feeling seems to be that Spain did well to sell the full €3bn (see 9.34am), but it had to pay dearly in order to get the bills away. The FT markets editor sums it up... | |
| Spain forced to pay up in auction of treasury bills, but gets away what it wanted. Phew, I think | |
| — Chris Adams (@chrisadamsmkts) June 19, 2012 | |
| 9.34am: It was a tale of two debt auctions this morning. Denmark has just sold 1.6bn danish krone (€215m) of debt maturing in 2014 at a negative bond yield of -0.08%. That compares with an average yield of 0.31% at the last auction. | |
| Spain, meanwhile, has sold €640m of 18-month bills with an average yield of 5.1%, compared with 3.3% at the last auction. It also sold €2.4bn of 12-month bills with an average yield of 5.07%, compared with 2.98% at the last auction. | |
| 9.30am: UK inflation fell unexpectedly in May to its lowest in two and a half years due to slower price rises for food and fuel. CPI came in at 2.8% for May compared with 3% in April and expectations of a reading of 3%. RPI was 3.1% compared with 3.5% in April and a forecast of 3.3%. | |
| 9.22am: Germany's constitutional court has upheld the case against the European Stability Mechanism, the permanent rescue fund to replace the EFSF. The court said Angela Merkel's government had not consulted parliament sufficiently about the configuration of the scheme. | 9.22am: Germany's constitutional court has upheld the case against the European Stability Mechanism, the permanent rescue fund to replace the EFSF. The court said Angela Merkel's government had not consulted parliament sufficiently about the configuration of the scheme. |
| The ESM is supposed to come into effect in July but has not yet been ratified by many eurozone member states, including Germany. This ruling does not bar the ESM from taking effect, but it can't be helpful in terms of getting it through parliament. | The ESM is supposed to come into effect in July but has not yet been ratified by many eurozone member states, including Germany. This ruling does not bar the ESM from taking effect, but it can't be helpful in terms of getting it through parliament. |
| 9.18am: Spanish yields have reacted to news of the delay to the banking audit (see 9.10am) accordingly. The yield on Spanish 10-year debt is pushing up towards yesterday's highs, currently at 7.19%. | 9.18am: Spanish yields have reacted to news of the delay to the banking audit (see 9.10am) accordingly. The yield on Spanish 10-year debt is pushing up towards yesterday's highs, currently at 7.19%. |
| As Sony Kapoor of think-tank Re-Define notes, it's not exactly the way to build confidence... | As Sony Kapoor of think-tank Re-Define notes, it's not exactly the way to build confidence... |
| Lesson in How not to build confidence: #Spain says it needs more time 2 gather information on exactly what's going on with it's banks! | Lesson in How not to build confidence: #Spain says it needs more time 2 gather information on exactly what's going on with it's banks! |
| — Sony Kapoor (@SonyKapoor) June 19, 2012 | — Sony Kapoor (@SonyKapoor) June 19, 2012 |
| 9.10am: The full audit of the Spanish banks has been delayed from July to September, fuelling fears that the banks may need more than originally thought (see 8.25am). Spain's central bank has apparently agreed the delay with the government, the IMF and the ECB. Accendo Markets' head of research wonders what's keeping them. | 9.10am: The full audit of the Spanish banks has been delayed from July to September, fuelling fears that the banks may need more than originally thought (see 8.25am). Spain's central bank has apparently agreed the delay with the government, the IMF and the ECB. Accendo Markets' head of research wonders what's keeping them. |
| Spain says wants more time to gather information; what on? Ever deteriorating non-performing loan figures? | Spain says wants more time to gather information; what on? Ever deteriorating non-performing loan figures? |
| — Mike van Dulken (@Accendo_Mike) June 19, 2012 | — Mike van Dulken (@Accendo_Mike) June 19, 2012 |
| The first phase of the report is still expected this week. It was scheduled for Thursday and there is some speculation it may come today. | The first phase of the report is still expected this week. It was scheduled for Thursday and there is some speculation it may come today. |
| 8.45am: And there's more bad news for France after one of its largest companies, food group Danone, said operating profits for 2012 would fall as the economic climate in southern Europe, notably Spain, deteriorated. The shares dropped 6.5%. | 8.45am: And there's more bad news for France after one of its largest companies, food group Danone, said operating profits for 2012 would fall as the economic climate in southern Europe, notably Spain, deteriorated. The shares dropped 6.5%. |
| 8.33am: French business confidence declined again in June. It decreased from 93 in May to 92, and was at 98 in March this year. Manuel Maleki of ING says: | 8.33am: French business confidence declined again in June. It decreased from 93 in May to 92, and was at 98 in March this year. Manuel Maleki of ING says: |
| French business confidence stayed low due to an anaemic domestic market. Moreover, the poor international climate and the uncertainty regarding the future of the eurozone after the Greek election and doubts on the Spanish banking sector have hit French business confidence. The announced taxes on dividends and the political tensions between France and Germany, its first trade partner, are unlikely to improve business sentiment any time soon. | French business confidence stayed low due to an anaemic domestic market. Moreover, the poor international climate and the uncertainty regarding the future of the eurozone after the Greek election and doubts on the Spanish banking sector have hit French business confidence. The announced taxes on dividends and the political tensions between France and Germany, its first trade partner, are unlikely to improve business sentiment any time soon. |
| 8.25am: There are rumours that the report on Spanish banks – which will determine how much of the proposed €100bn bailout they will need – could be released today instead of Thursday. Gary Jenkins of Swordfish Research says it is unlikely to be good news: | 8.25am: There are rumours that the report on Spanish banks – which will determine how much of the proposed €100bn bailout they will need – could be released today instead of Thursday. Gary Jenkins of Swordfish Research says it is unlikely to be good news: |
| Spain was not helped yesterday by speculation that the independent audit of the banks could show that the total amount required is over the already agreed €100bn bailout figure. This is just a rumour but I think it is fair to say that the €100bn figure was originally described as allowing for any eventuality with lots of headroom so if the figure does end up being over €75bn then yet again European officials / politicians will have made a bad situation even worse. | Spain was not helped yesterday by speculation that the independent audit of the banks could show that the total amount required is over the already agreed €100bn bailout figure. This is just a rumour but I think it is fair to say that the €100bn figure was originally described as allowing for any eventuality with lots of headroom so if the figure does end up being over €75bn then yet again European officials / politicians will have made a bad situation even worse. |
| 8.20am: In the debt markets, the yield on Spain's 10-year bonds – effectively the interest rate on the bonds – is at 7.16%, slightly lower than yesterday's high of 7.26%. | 8.20am: In the debt markets, the yield on Spain's 10-year bonds – effectively the interest rate on the bonds – is at 7.16%, slightly lower than yesterday's high of 7.26%. |
| The yield on Italy's 10-year bond is bouncing around the 6% mark, currently at 6.04% (according to Tradeweb data). | The yield on Italy's 10-year bond is bouncing around the 6% mark, currently at 6.04% (according to Tradeweb data). |
| Two banks, ING and BNP, are saying the ECB may resume its bond buying programme if Spain's 10-year yields reach 7.5%. | Two banks, ING and BNP, are saying the ECB may resume its bond buying programme if Spain's 10-year yields reach 7.5%. |
| 8.00am: Quick look at the markets, which have opened slightly higher. | 8.00am: Quick look at the markets, which have opened slightly higher. |
| UK FTSE 100: up 0.5%, or 28 points, at 5519 France CAC 40: up 0.5% Spain IBEX: up 0.3% Germany DAX: up 0.2% Italy: FTSE MIB: up 0.3% | UK FTSE 100: up 0.5%, or 28 points, at 5519 France CAC 40: up 0.5% Spain IBEX: up 0.3% Germany DAX: up 0.2% Italy: FTSE MIB: up 0.3% |
| 7.52am: The main news will be coming out of Greece and the G20 summit today, but there's also inflation figures in the UK and economic confidence from Germany. | 7.52am: The main news will be coming out of Greece and the G20 summit today, but there's also inflation figures in the UK and economic confidence from Germany. |
| Later in the day, the US Federal Reserve will start its two-day meeting on interest rates. My colleague Dominic Rushe reports that analysts expect the Fed to step in with a new round of Operation Twist to bolster the fragile American recovery. | Later in the day, the US Federal Reserve will start its two-day meeting on interest rates. My colleague Dominic Rushe reports that analysts expect the Fed to step in with a new round of Operation Twist to bolster the fragile American recovery. |
| • UK inflation figures for May: 9.30am • Germany ZEW economic confidence survey for June: 10am • Eurozone ZEW economic confidence survey for June: 10am • US housing starts and building permits for May: 1.30pm • JP Morgan's Jamie Dimon testifies: 2.30pm | • UK inflation figures for May: 9.30am • Germany ZEW economic confidence survey for June: 10am • Eurozone ZEW economic confidence survey for June: 10am • US housing starts and building permits for May: 1.30pm • JP Morgan's Jamie Dimon testifies: 2.30pm |
| In the debt markets, Spain will be selling €2bn-€3bn of 12-18 month debt, while Greece is looking to raise €1bn in 13-week treasury bills. Later in the day, the US will be selling 4-week bills. | In the debt markets, Spain will be selling €2bn-€3bn of 12-18 month debt, while Greece is looking to raise €1bn in 13-week treasury bills. Later in the day, the US will be selling 4-week bills. |
| 6.57am: Good morning and welcome to our rolling coverage of the eurozone debt crisis. Greece's conservatives, New Democracy, said late on Monday that they expect to form a new cabinet with the Pasok Socialists and possibly another smaller centre-left party today. | 6.57am: Good morning and welcome to our rolling coverage of the eurozone debt crisis. Greece's conservatives, New Democracy, said late on Monday that they expect to form a new cabinet with the Pasok Socialists and possibly another smaller centre-left party today. |
| Overnight, the IMF announced that its lending capacity has almost doubled following an increase in contributions to the fund to $456bn (£366bn). In a statement from the G20 meeting in Los Cabos, Mexico, IMF chief Christine Lagarde said: | Overnight, the IMF announced that its lending capacity has almost doubled following an increase in contributions to the fund to $456bn (£366bn). In a statement from the G20 meeting in Los Cabos, Mexico, IMF chief Christine Lagarde said: |
| These resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members. They will be drawn only if they are needed as a second line of defence. | These resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members. They will be drawn only if they are needed as a second line of defence. |
| Over in Los Cabos, EU commission president José Manuel Barroso has been sounding very defensive and insisting the origins of the eurozone crisis lie in the unorthodox policies of American capitalism. My colleague Patrick Wintour is reporting from the summit. | Over in Los Cabos, EU commission president José Manuel Barroso has been sounding very defensive and insisting the origins of the eurozone crisis lie in the unorthodox policies of American capitalism. My colleague Patrick Wintour is reporting from the summit. |