Spain's 5-year auction raised EUR 3.5 bln auction, which was deemed good by bond traders considering the negative chatter about a possible Moodys downgrade. CHINAs June PMI may have escaped a decline below the 50 level, but the decline to 14-month lows at 50.4 was sufficient to send the Shanghai Composite and Nikkei down 2% and 2.6% respectively. Markets await the EUR 442 bln repayment of the 12-month funds obtained from the ECB, which is due within the half hour. recurring pattern of lower highs (see chart) highlights the difficulty of the $1.2370-75 resistance, while the interpolated downside target suggests a looming break towards the $1.2105-00.