Today’s Top Stories; European bank stress tests are being expanded to include a further 60-120 banks'; New deepwater drilling ban could come today $APC $DB

· ECB 3-month tender - the relatively small amount of demand at the 3-month tender (only EU131.9B) is being taken as a positive - the fear had been that ~EU220B+ would be taken up at this 3-month tender ahead of Thurs' EU440B 12-month expiration (some worst case scenarios feared that EU440B+ would be taken up at this 3-month tender); Note that our European trading desk has been better for sale from the HF community (esp. in futures) following the ECB’s loan announcement.

· ECB takes the place of the interbank market in Europe – despite today’s 3-month tender results, the FT notes this morning that the ECB is currently lending close to €900bn ($1,098bn, £728bn) to eurozone commercial banks, jumping to near-record levels

· Bank stress tests - WSJ report that the European bank stress tests are being expanded to include a further 60-120 banks, that it will test for whether an institution can withstand the effects of a sovereign debt default in the Eurozone and it will be published in 2H July (potentially setting a catalyst for when this whole issue can be resolved by the market)

· European banks to be subject to new bonus rules - according to Reuters, bankers in EUrope won't be allowed to take more than 1/3 of their bonuses in cash from the start of '11 – Reuters  

· Spain - Restructuring of the Span's Cajas is moving forward w/consolidation & restructuring

· Newsflow out of Asia was relatively light as the region fell across the board on back of the weak US trading yesterday. Chinese Premier Jiabao said that China will stick w/its current policy course as the country is heading in the right direction and the PBOC strengthened the fixed reference rate for the Yuan for the 6th straight sevssion.

· Hedge Fund managers targeted by NY State – state thinks hedge fund managers from Connecticut and New Jersey should pay the state of New York millions more in taxes.  lawmakers over the weekend embraced a proposal by Mr. Paterson to begin taxing nonresident fund managers’ carried interest.  NYT 

· Double-Dip debate - “Warning signals of a double-dip recession flash brightly across the world” – the London Telegraph warns that global bond markets are flashing warning signals of a sharp slowdown in growth across the world; meanwhile, the FT warns against jumping on the "double dip" bandwagon just yet   says the ECRI may be getting too much attention   the ECRI itself is cautioning against reading too much into the recent move. 

· UK Interest Rates – BoE’s Fisher hints at willingness to raise rates if inflationary pressures persist. Fisher reiterating that the central bank’s mandate is to fight inflation and that “should it appear likely that inflationary pressure is sustained at a higher level into the medium term, then it is clear what our mandate would require us to do.” Note that this follows Sentence’s push at the BoE’s recent meeting for a rate increase.  London Telegraph headline today – “Bank of England starts to dust off its inflation-fighting credentials”.   

· AIG won’t be able to recoup losses from its bank partners via lawsuits according to a report in the NYT

· APC – the co knew of, and approved, key well designs on Macondo; APC knew of sig. operational decisions made by BP also – FT   

· New deepwater drilling ban could come today – Interior Sec Salazar is scheduled to appear before the House Natural Resources Committee on the reorganization of the former Minerals Management Service (MMS); Salazar could provide details on what a new ban would look like – Bloomberg 

· ADBE – GOOG’s TouTube comes to the defense of Flash – says HTML5 is great but doesn’t do everything (TechCrunch) 

· Housing – WSJ says LEN “cuts its prices as sales hit a wall”

· Equity raising lowest in 5 yrs in H1 - Global equity markets issuance has reached $309bn so far this year, marking the slowest start since 2005; issuance in Q2 fell 48% Y/Y (FT) 

· US equity technicals (Krauss) - Probes 1035 new 2010 low. Closes on 1040 May/June low. Bulls gain above Tues 1071- 1074 bear gap. Next supports are 1021/1008, then 986 2008 H+S neckline, and 956-943 “floor”