Follow ‘MoreLiver’ on Twitter
EUROPE
Mark
Carney: Fortune favours the bold – BoE
Thank
Carney for Meddling in Europe – View
/ BB
Real
effects of credit rating downgrades – voxeu
In the wake
of the Crisis, policymakers have introduced liquidity regulation to promote the
resilience of banks and lower the social cost of crisis management. This column
shows that a funding liquidity shock, manifested as lower access to wholesale
sources of funding following a credit rating downgrade, translates into a
significant decline in both domestic and foreign lending. Liquidity
self-insurance by banks mitigates the impact of a credit rating downgrade on
lending.
Podemos
Seeks to Restructure Public Sector Debt – BB
Fear of
deflation driving Riksbank strategy – TradingFloor
Riksbank
meeting on February 12 could be pivotal for direction of SEK * Riksbank
concerned with spectre of deflation but SNB-style option unlikely * Swedish
housing bubble an increasing area of concern for central bank
DENMARK / SWITZERLAND
SNB
unofficially targeting 1.05/1.10 francs/euro - sources – Reuters
Denmark
halts bond issues in surprise move to keep crown stable – Reuters
The Danish
central bank digs deeper into its armoury – Nordea
GREECE
The
Greek-Troika conflict is roiling markets, boardrooms and cabinet offices around
the world. Crises are best solved by
recognising losses, allocating them and moving on, so the biggest risk, this
column argues, is that a compromise kicks the can further down the road. As the can rolls on, the scenery becomes
politically and socially less attractive – fuelling the rise of political
animosities, nationalism, and fringe parties.
Greece is a special case but indicative of the core
problem – deficient EZ governance structures that mean societies are stuck with
increasing socioeconomic exclusion and political despair. The crisis will
continue until the necessary further deepening of EZ institutional structures
is completed.
The “Greek
Issue”: flowchart from Deutsche Bank – Ritholtz
Greece
hires Lazard to advise on debt – FT
Could
Tsipras Upset Balance of Power in Europe? – Spiegel
Kiron Sarkar
on Greece – Ritholtz
Saying the
obvious – Simon
Wren-Lewis
Greece’s
problems are the result of the eurozone having no fiscal policy – The
Guardian
Grexit
risk in Q&A: Two steps back and one forward – Danske
Bank
Greece Wants Special ECB Help While Going
‘Cold Turkey’ on Aid – BB
Merkel Said
to Avoid Meeting Tsipras, Doubt Tax Plans – BB
Eurozone
alarm grows over Greek bailout brinkmanship – FT
Münchau: Grexit
is an avoidable catastrophe for the eurozone – FT
My Friend
Yanis, The Greek Minister Of Finance – Forbes
Greek
turmoil an unexpected boon for German AfD eurosceptics – Reuters
Obama
Expresses Sympathy for New Greek Government – WSJ
Obama
"Expresses Sympathy"; Lazard Says 50% Haircut "Reasonable"
– ZH
Dear
Eurozone officials, Mr Putin is waiting – Bronte
Capital
Europe Should Call Greece's Bluff – View
/ BB
Karl
Whelan: What’s Going On with Greece and the ECB? – Medium
[Dec 2014]
2014 is not 2012 – Macropolis
5 Questions
About the ECB’s Complicated Relationship With Greece – WSJ
Chaos,
Fear, Panic Descend on EU’s Hallowed Halls of Power – Wolf
Street
Greece and the euro area need a deal
within days, not months – Bruegel
George
Osborne warns Greek debt standoff is threatening global economy – The
Guardian
George
Osborne warns Greek stand-off poses ‘greatest’ risk – FT
Britain's Osborne says Greek stand-off
biggest risk to the global economy – Reuters
Greece Just Blew Up the Empire's Death
Star of Debt – Charles
Smith
EUROPEAN CENTRAL BANK
ECB
Coeure: QE Program is Open Ended – WSJ
Coeure
Says ECB Will Take Existing Maturities as Guide for QE – BB
Coeure: “In
terms of the maturity allocation within a given sovereign bond universe, it
will be broadly based on market outstandings. There is very little leeway for
discussion or readjustment and we want to create as little market distortion as
possible.”
European
banks: Easing means squeezing – The
Economist
Quantitative
easing has both good and bad implications for Europe’s banks
ECB
Bond-Buying Plan Has Investors Questioning How It All Works – BB
Bill
Gross says European QE is ‘too little, too late’ – FT
Lamfalussy
was right: independence and interdependence in a monetary union – ECB
Speech by
Benoît Cœuré, Member of the Executive Board of the ECB, at Lamfalussy Lecture
Conference organised by Magyar Nemzeti Bank in Budapest, 2 February
2015
UNITED STATES
As of
Yet, Fed Not Changing Tune – Tim
Duy
I am not
convinced the Fed is changing its thinking as quickly as markets think the Fed
is changing its thinking. That means that Fedspeak might continue to be hawkish
relative to expectations.
US
labour compensation update – FT
Leading
indicators of wage growth are ticking upwards, though not sharply
Personal
Income +0.3% in December, Core PCE prices +1.3% YoY – Calculated
Risk
Consumer
Spending Declined in December by Most in Five Years – BB
Don't Freak
Out About December's Drop in Consumer Spending – BB
U.S. consumer spending weakest since 2009,
inflation muted – Reuters
Inflation
Reading Furthest Away From Fed Target Since 2009 – WSJ
ASIA
The Reserve
Bank of Australia is in a tricky position. The last
thing a strong housing market needs is lower interest rates, but on the other
hand the economy is slowing, commodity prices falling, unemployment rising and
inflation headed towards the lower end of the target band.
Since 2008,
debts owed by China’s nonfinancial sector have soared
by more than 90 percentage points relative to GDP. Almost all of that increase can be
attributed to corporate borrowers.
REGULARS
Daily
Central Banks – WSJ
Hilsenrath’s
Take:Yellen Prepared to Fight A Revived “Audit the Fed” Movement * Fed’s
Tarullo Zeroes In on Risk From Asset Managers * Fed’s Williams Upbeat on
Economy, Says Summer Rate Rise Likely * ECB’s Constancio Denies QE Was Delayed
by German Opposition * Denmark Suspends Bond Issuance to Protect Krone’s Peg
Daily
Macro – WSJ
China’s manufacturing sector, whose
expansion over the past three decades was largely responsible for converting
the country into the world’s second-largest economy, is now indisputably in
contraction, according to purchasing manager indexes out Monday. That will
weigh on growth elsewhere.
Danske
Daily – Danske
Bank
Eye-Opener – Nordea
Danish
central bank fights back * China slows * US ISM expected down but
still solid * US 10-year yield plummets to its
lowest since May 2013 * Disappointing data will challenge USD strength
Dollar
Consolidates in Choppy Activity – Marc
to Market
Daily
Shot – TradingFloor
The
political winds are shifting in the eurozone * Rate hike expectations in the UK have fallen dramatically * More
concerns about Canada's economy
US Open – ZH
Futures
Attempt Bounce On Sudden Rebound In Crude
FX
Update – TradingFloor
The US dollar
picture looks quite healthy, particularly given the market’s very complacent
view on the US Federal Reserve’s policy stance. The latter leaves the market
highly sensitive to US data surprises this week, particularly if they are
positive. Also – the market is increasingly positioned for an Reserve Bank of Australia cut – will it deliver?
From the
floor – TradingFloor
The market
is out of step with the FOMC and with a potentially pivotal week of US data
ahead, any surprises to the upside could see some real impact on the market
with dollar strength likely to ensue. And forget that rally in oil –
fundamentals continue to underpin a move downwards.
OTHER
Dollar
Drivers – Marc to Market
The bull
case for the US dollar rests on two legs. The first is that the policy response
to the crisis has produced superior economic results in the US that would lead
to the Fed raising rates later this year. The second was the ongoing challenges
faced by Europe and Japan. For several
months both legs had strengthened.
An
Unconventional Truth
– Project
Syndicate
Nouriel
Roubini: To be effective, monetary stimulus must be accompanied by temporary
fiscal stimulus, which is now lacking in all major economies. That is why,
given persistent insufficient aggregate demand, unconventional monetary
policies will remain a central feature of the macroeconomic landscape.
KVP
Macro Take: Watch central bank moves and the rupee revival – TradingFloor
The key
focus will be on the Reserve Bank of Australia and the Reserve Bank of India on Tuesday and the Bank of England
on Thursday. There are also quite a few Federal Reserve and European Central
bank speakers this week.
The
Matrix: A strategist’s roving thoughts - shaken but not stirred – TradingFloor
Kay
Van-Petersen: A high conviction take on the USDCHF still prevails; thoughts on
Yahoo's spin-off from Alibaba; a mea culpa on fourth quarter US GDP and
checking out the media with Bloomberg and Investor Insights.
Week ahead
rich in events: Greece, Denmark, ECB – TradingFloor
The
beginning week is filled with events that escape the hasty viewer of economic
data release calendars. Be ready for Greek panic, additional information on the
European Central Bank's asset purchase program and Denmark's attempts to maintain the EURDKK
exchange rate within the narrow confines of the ERM2.
NEGATIVE YIELDS / INFLATION
16% Of
Global Government Bonds Now Have A Negative Yield: Here Is Who's Buying It – ZH
US
Treasury yields and shrinkage, sovereign bond availability edition – FT
Summing
across the U.S., Japan and the Eurozone, almost $800
billion in debt instruments will have to be pried from the hands of private
investors over the next two years
The
decline in inflation compensation – Bruegel
Fed and ECB
officials appear to have interpreted market measures of inflation compensation
differently
Negative
govvies: why would ya? – FT
The total
universe of government bonds traded with a negative yield was $3.6tr last week
or 16 per cent of the JPM Global Government Bond Index. A list of those willing/
forced to buy those negative yielding government bonds.
What
Negative Bond Yields Mean for Investors – WSJ
Disinflation
in EU Countries outside the Eurozone – iMFdirect
JANUARY PURCHASING MANAGER INDICES
China: weak manufacturing strengthens
case for more easing – Danske
Bank
Chinese
Stocks Tumble, Yuan Plunges – ZH
China's Feeling the Pressure to Join
Global Easing – BB
ISM
Manufacturing Tumbles To One-Year Lows As New Orders Crater – ZH
US Manufacturing "Remains In Low
Gear" - Hovers Near One-Year Lows – ZH
ISM
Manufacturing index declined to 53.5 in January – Calculated
Risk
ISM
Manufacturing Report Disappoints – Bespoke
FINNISH
Yhdysvallat
nostaa ohjauskorkoa vasta syyskuussa | Euroopasta tärkeää tietoa Suomen
suhdannekuvaan | Euroalueen inflaatio hidastui tammikuussa selvästi
Jan
Hurri: Kolme tapaa laskea Suomen Kreikka-riskit – TalSa
Suomen
ja Kreikan väliset suorat ja epäsuorat rahoitussuhteet ovat sellaista
palapeliä, että Suomen Kreikka-riskeistä ei tahdo saada selvää edes miljardin
euron tarkkuudella. Arviot Suomen Kreikka-altistumasta vaihtelevatkin helposti
alle neljästä yli kahdeksaan miljardiin euroon sen mukaan, mitä lukuihin
lasketaan mukaan ja mitä ei.
Valtioiden
tekemät sopimukset ja demokratia – Tyhmyri
Demokratiaan
kuuluu sopimusten purkaminen
Kreikan rahaministerin näkemykset ovat rehellisyyttä
arvostavalle masentavaa luettavaa – HS
EVA maahanmuuttajien asialla – Libera
IL:n tutkimus: kansalaisten leikkauslista vastaa
”häkellyttävän hyvin” PS:n esityksiä – PS
”Te tapoitte juuri troikan” – PS
Ollaanko Kreikasta tekemässä varoittava esimerkki? – Peter
Nyberg
"Kolmikannan jähmeät päätösrakenteet eivät ole
kansakunnan etu" – Verkkouutiset
Kansanedustaja Elina Lepomäki (kok.) haastaa kolmikantaista
päätöksentekoa sosiaaliturvakysymyksissä. Akavan Sture Fjäder (kok.) ei lämpene
radikaaleille ehdotuksille.
Deflaatiota vai ei? – Sakari
Heikkinen
Suomen Ekonomit palkitsivat talousymmärrystä luovan
kirjan – Verkkouutiset
Sixten Korkman on saanut Suomen Ekonomien kirjallisuuspalkinnon.