As hopes of further ECB action looms, Spain's auctions of 12- and 18-month bonds were well-received with yields for both securities dropping, to 3.07% (from 3.92%) and 3.34% (from 4.24%) respectively. Meanwhile, market sentiment was lifted amid optimism from Greece. Before discussions among financial leaders regarding Greece's austerity program, Germany indicated that they are willing to offer concessions to Greece. Norbert Barthle, Budget spokesman of the CDU, stated that "small concessions are feasible" if they are inline with the framework of the second aid program. According to Barthle, "for instance, the interest and maturity on loans could be adjusted, as in the case of the first aid package for Greece".
In the US, the market focused on earnings results and comments from Fed members regarding QE3. Retailer Best Buy reported a -91% decline in net income to $12M in 2Q12. The company names a new CEO and suspended profit forecast for the second half of the year. Investors interpreted this as signals that consumer spending in the country is contracting. Comments from Atlanta Fed's President Dennis Lockhart tamed QE3 expectations. He said that "there is a risk to monetary policy being employed too aggressively and without effect to address economic problems that can be resolved only by fiscal reforms that involve making tough choices about the allocation of public resources". He also stated that it's appropriate to keep interest rates at exceptionally low levels through late 2014.
Concerning US oil inventory, the industry-sponsored API estimated that crude inventory fell -6 mmb in the week ended August 17. For fuels, gasoline gained +0.87 mmb while distillate slipped -1 mmb. The report from the EIA/DOE will probably show that crude stock dipped -0.25 mmb, gasoline added +1 mmb and distillate dropped -1 mmb.