“When I have to depend upon hope in a trade, I get out of it” — Jesse Livermore

1. Spanish government sends out mayday signal — Spanish Treasury Minister Cristobal Montoro announced because of the risk premium, Spain is shut out of the markets to finance its bond.
2. JPMorgan’s loss could hit $4.2B estimate — International Strategy & Investment Group reported JPMorgan (JPM) may report a $4.2B trading loss.
3. G7 to hold emergency call to discuss EU problems — with fears that a capital flight from Spain could turn into a full bank run, G7 finance minsters and central bank governors have arranged an emergency conference call to discuss the eurozone crisis.
4. Portugal to inject over €6.6B in three banks — the Portuguese government is using more than €6.6B of its international bailout money to inject €1.65B into state-controlled Caixa Geral de Depositos, up to €3.5B into Banco Comercial Portugues, and €1.5B into Banco BPI (BBSPY.PK). The rescue comes as the banks face fast-rising loan losses.
5. China’s PBOC cuts interest rates — The People’s Bank of China lowers benchmark one-year lending and deposit rates by 0.25 percentage point on loans and deposits, and moved to allow rates to float more freely, in a bid to support economic growth and advance reform of the financial system.
6. Fed moves forward with Basil III capital rules — banks will be required to hold the strictest form of common-equity capital at 7% of their risk-based assets, up from 2% currently. The regulation will be phased in between January 2013 and January 2019. America’s 19 biggest banks are at least $50B short of meeting Basel III requirements under new rules that the Fed approved.

The week ahead — Economic data from Econoday.com: