What central bankers think: UBS polled around 80 reserve managers from central banks recently and found that their worries focus on the eurozone, where a potential break-up and/or a sovereign default are the main concerns, Lisa writes. While they generally think Bund yields are too low, resource competition and demographics are the biggest longer-term problems. The FOMC extended Operation Twist to the end of the year: While no further easing was announced, apart from the extension of Twist, the statement was on the dovish side. Cardiff's post has some commentary and the full statement. How Spanish bond holders might be better off, even after subordination: Joseph writes that existing bondholders are better off, all else being equal, with senior EFSF/ESM financial support rather than with recapitalisation bonds that would otherwise have to be issued. However, the bonds might still not be pricing in true default risk and recovery value. Invensys falls 17 per cent Thursday: After renewed speculation of a bid yesterday, a statement was released by Invensys this morning, writes David. The company said there are no ongoing discussions with potential partners. Here's an overview of how to solve Europe's crisis: Simon's post has a cheat sheet from SocGen charting Europe's options and the hurdles to overcome for each policy. JPMorgan sells "whale" holdings. The bank has offloaded the majority of its damaging position in a credit derivatives index that contributed to losses of more than $2bn and prompted multiple regulatory and legal investigations, according to people familiar with the matter, the FT reports. Data from Markit showed a record $31bn traded on Tuesday in the CDX.NA.IG.9 index, which tracks the spreads on credit derivatives of US corporations, with 238 trades, a sharp jump compared with the average of less than 50 trades a day. Samaras to reveal new Greek cabinet. The new prime minister is expected to announce his government ministers on Thursday. The two parties that have joined the coalition have refused to let their MPs join the cabinet, raising worries about the how effective the government will be, the BBC reports. Meanwhile, the country's stock market is under review for reclassification to emerging markets status by MSCI, Bloomberg reports. It would be the first time an advanced nation was cut to developing status. Slowdown in China's manufacturing sector. HSBC's Chinese purchasing managers" index is set to fall to 48.1 in June from 48.4 in May, which would mark a seven-month low. The flash figure adds to the growing worries about the health of China's economy, reports the FT. Walmart set to cut Mexico expansion plans. It follows allegations that the world's largest retailer paid bribes for permits to open stores in the country more quickly. It now expects to open 325 to 335 new stores this year, down from 410 to 436 announced in February, the FT reports. Most US homeowners are paying above-market mortgage rates. Figures from CoreLogic show 20.5m of 39m creditworthy "prime" borrowers are paying rates of more than 5 per cent while just 5.7m households are enjoying rates of less than 4 per cent, indicating that government efforts to spur refinancings have yet to fully benefit households despite ultra-low headline borrowing costs, the FT reports. Markets: Concerns about weaknesses in China added to general global growth worries to put pressure on market sentiment. The FTSE All-World equity index was down 0.3 per cent following a 0.7 per cent retreat in Asia while the FTSE Eurofirst 300 halved early losses to sit down 0.3 per cent. Wall Street's S&P 500 futures point to a 0.2 per cent dip for the US benchmark. This entry was posted by Masa Serdarevic on Thursday, June 21st, 2012 at 10:48 and is filed under Uncategorised.