Eurozone Unemployment At Record Level

Mario Draghi, the head of the European Central Bank, is in Barcelona today and the ECB will announce its latest decision on interest rates later today. Analysts expect the bank of maintain rates at 1%, but with news out that eurozone unemployment now stands at a record 10.9% (up from 9.9% the year before) and bad news from Spain dominating financial news, the pressure on Draghi to further ease monetary policy is growing.

As Robert Wenzel points out at Economic Policy Journal, despite Draghi’s insistence that Spain will need no more ECB loans, it is difficult to see any other choice considering that since last summer, such loans are all that's been keeping Spain propped up. Compounding this problem is the fact that Spanish credit institutions are – in Wenzel’s words – “already stuffed with government paper and it will be difficult for them to take on much more.”

How long until LTRO 3 Is launched?

Precious metal prices remained flat yesterday, though later in the session erroneous reports that CME Group was planning big across-the-board increases in margin requirements in order to comply with new government regulations encouraged a sell-off in all commodities. News that new orders for US factory goods in March recorded their biggest decline in three years also encouraged commodity selling, and helped push the dollar up.

Fitch is warning that the credit quality of US companies is being threatened by economic uncertainty, while over at The Big Picture blog, James Bianco asks whether or not the US government will bump up against its “debt ceiling” before the November elections. Bianco comments: “current rates of spending could make this a critical issue just prior to the November elections.” Who this could favour politically is anyone’s guess.