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Pre-Market Primer: Brazil FinMin Charges Fed With Starting 'Currency War'


And Spain moves closer to taking the bailout.

MINYANVILLE ORIGINAL European Union authorities are already discussing the logistics of a bailout program for Spain that will be revealed next week, according to reports in the Financial Times. The program will include open-ended bond-buying from the European Central Bank. "Pre-approval" of the program by European officials is likely to make the rescue more palatable for Spaniards and Spanish president Mariano Rajoy, who are reluctant to take a bailout with a crushing austerity regime attached to it.

Yesterday, Rajoy denied the government of Catalonia's attempts to gain more tax autonomy, raising fears that the region will attempt to break away from Spain. Separatist parties in the wealthy region, which includes the commercial hub of Barcelona, are slated to win the upcoming local elections. Catalans, like their counterparts in the richer American states, pay 8% more in national taxes than they receive back in services.

Meanwhile, Greek lawmakers are still trying to cover a gap in the EU-mandated austerity cuts as the anti-bailout opposition parties threaten to oppose the cuts with street protests and strikes.

The euro rose against the dollar to $1.2987 on hopes that Spain will take the bailout. European stocks also rallied and Asian shares closed higher today. Oil futures in the US rose 0.79% to $93.15 and spot gold prices climbed 0.36% to $1776.50.

Ahead of the opening bell, US stock futures are set to open higher. While there are no major economic reports today, Dow (INDEXDJX:.DJI) futures rose 0.32% to 13,558.00, S&P 500 (INDEXSP:.INX) futures gained 0.25% to 1,457.50, and Nasdaq (INDEXNASDAQ:.IXIC) futures climbed 0.29% to 2,861.50.

Oracle (NASDAQ:ORCL) shares rose slightly in after-hours trading after the company announced weaker-than-expected revenue in the last quarter. The software company saw earnings per share rise 11% to $0.53 from $0.48, however. The 2% drop in revenue confirmed worries that the company is not keeping up with the sector's move to cloud computing.

McDonald's Corp. (NYSE:MCD) shares rallied this morning as the company approved a 10% rise in its quarterly dividend to $0.77 per share.

Brazilian Finance Minister Guido Mantega condemned the US and Japan's recent moves to expand quantitative easing, saying that the policies are setting of "currency wars" and causing problems in emerging market countries.

He says that the potential inflation of the dollar and yen pressures other countries to devalue their own currencies to stimulate exports.

"Currency war is being used by countries that are important and the quantitative easing (QE) that's been done by the Fed has stimulated this kind of currency war. The immediate answer to the US QE is Japanese QE as Japan has already reacted and will adopt measures to devalue the yen," Mantega said. "They will be stimulating the currency wars as it will lead all countries also to pursue these wars... It's natural other countries will defend themselves from these attitudes."

Twitter: @vincent_trivett
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