MoreLiver's Daily: 8th Apr - IMF's Outlook is out (heh), ECB doubted

Europe's banking union may soon exist on paper. In practice, the eurozone banking system is likely to remain fragmented along national lines and divided between a northern “core,” where governments continue to stand behind local banks, and a southern “periphery,” where governments have run out of cash.

The Periphery’s Purgatory – Project Syndicate

The eurozone’s core economies are showing signs of recovery, and financial conditions in the over-indebted periphery are improving as well. But, as the contours of Greece's troubled economy make clear, capital shortages, depressed demand, and reform bottlenecks mean that continued progress is far from certain.

Greek rebound is astonishing – Hugo Dixon / Reuters

There are still political risks, and the real economy is only now starting to turn. But the financial recovery is impressive.

EUROPEAN CENTRAL BANK

Euro Gains as ECB Signals Deflation Risk Is Contained – BB

Euro zone debt yields edge up as Nowotny tempers ECB QE hopes – Reuters

ECB’s Bonnici Sees No Sign of Deflation – WSJ

Mario Draghi’s ‘whatever it takes’ may not be enough for the euro – FT

The eurozone faces problems that are beyond the control of the president of the ECB

Euro-Zone Banks Put Forward Fewer ABS at ECB – WSJ

The ECB’s annual report says the share of ABS as posted collateral declined, despite the ECB introducing less stringent standards.

A note on the Feasibility ECB Quantitative Easing – Place du Luxembourg

If the idea is to increase consumption and investment where it is most needed, it would make most sense to purchase Greek, Slovakian, Portuguese, Spanish, Irish, Italian, Slovenian, Dutch and French assets, rather than German, Belgian, Austrian or Finnish.

ECB Faces Bankers Venting Concerns on Balance Sheet Health Check – BB

ECB officials are being lobbied by bankers today over the complexity of gathering data for the health check of the region’s lenders and how to disclose the results

Has the ECB actually moved closer to QE? – Open Europe

While there may be ‘unanimous commitment’ to using such measures when needed, it’s still not clear what the criteria are for such action and it is even less clear that all members of the GC agree on when such action would be needed.

Germany and the quest for a stable monetary union – BIS

Speech by Mr Klaas Knot, President of the Netherlands Bank, at the Duitsland Instituut, Amsterdam, 7 April 2014.

The €1,000,000,000,000 question, revisited – FT

Just because there is unanimity about being prepared to use nonstandard tools does not mean that ECB governors agree on how bad things need to get to trigger a policy response

UKRAINE / RUSSIA

Ukraine Makes Security Sweep as Russia Warns on Crackdown – BB

Russia: 'Referendum' Or We Can't Protect You, Ukraine Proposes State Of Emegency – ZH

Russia says Ukraine needs "international assistance" on constitution – Reuters

Ukrainian Leaders Slam Russia for Attempt to 'Tear Country Apart' – WSJ

MACRO NUMBERS

U.K. Industrial Output Surges More Than Forecast – BB

UNITED STATES

Fed’s Bullard: Encouraged by Rebound in March Jobs Data – WSJ

MACRO NUMBERS

NFIB: Small Business Optimism Index increases in March – Calculated Risk

Small Business Sentiment Improved in March – dshort

ASIA

BANK OF JAPAN

Bank of Japan Gov. Kuroda Speaks After Monetary Decision – WSJ

Japan Trade Situation Remains Shaky – WSJ

No hint of imminent easing from Bank of Japan – Danske Bank

BOJ Refrains From Boosting Stimulus as Recovery Seen – BB

IMF’s WEO

World Economic Outlook: Recovery Strengthens, Remains Uneven – IMF

WEO Summary and Links – IMF

Although downside risks have diminished overall, lower-than-expected inflation poses risks for advanced economies, there is increased financial volatility in emerging market economies, and increases in the cost of capital will likely dampen investment and weigh on growth. Advanced economy policymakers need to avoid a premature withdrawal of monetary accommodation. Emerging market economy policymakers must adopt measures to changing fundamentals, facilitate external adjustment, further monetary policy tightening, and carry out structural reforms.

IMF: Economic Outlook – ZH

Comedy Of Forecast Errors – ZH

IMF Trims Global Growth Forecast – WSJ

Blanchard: Recovery Strengthening Despite Risks From Europe, Japan – WSJ

IMF Says U.S. Drives Growth as Russia, Brazil Weaken – BB

OTHER

”The Most Important Charts in The World – BI

Banks Urge Basel U-Turn on Global Asset-Backed Debt Rules – BB

Banks from Deutsche Bank to Barclays attacked proposals to overhaul global capital rules for asset-backed debt, saying they risk choking securitization while clashing with efforts to boost lending to businesses.

Great Graphic: New DM-EM Equity Convergence – Marc to Market

In the first several months of 2013, DM outperformed EM. The big EM sell-off coincided with first hint from the FOMC about tapering. EM recovered and tracked the DM until October. A new phase of divergence, with DM outperforming again lasted into early March.

Observation on EM, US Office Vacancy – Global Macro Trading

Dollar Squeezed – Marc to Market

Now that the dust settled from last week’s two big events, the ECB meeting and the US jobs report, a couple things seem clearer to many participants. First, any ECB QE program is not imminent (we have suggested June, not May is a more likely window) and second, that the US jobs data does not change the outlook for US policy and the vast majority of investors see the first rate hike more than a year off.

Feds to Wall Street: Nobody's Too Big to Jail – View / BB

FINNISH

Kestävän julkisen alijäämän suuruus – Roger Wessman

OECD:n indikaattori: Suhdannehuippu lähestyy – Roger Wessman

Teollisuusyhteiskunnan perään ei kannata haikailla – Verkkouutiset

Kumit puoliksi vai kaikille? – IS

Pian saatamme joutua maksamaan myös koulumatkat niille opiskelijoille, jotka eivät joko päässeet tai halunneet lähioppilaitokseen, kirjoittaa Ilta-Sanomien toimituspäällikkö Sanna Mattila.

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Tuesday, April 8

8th Apr - IMF's Outlook is out (heh), ECB doubted