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Friday, July 27

27th Jul - EU Open: Take cover-Friday?

Spanish 10 year bond yield - uptrend
The morning seems to start without much price correction. SPX effectively in a range with more to go before the upper limit - but not much room left. Same thing in EURUSD's downtrend - upside should be limited from here. I wrote my updated views and linked to plenty of views on the Fed and the ECB last night, please have a look:
 
Previously on MoreLiver’s:

News roundup – Between The Hedges
The 6am Cut London – alphaville / FT
Emerging Markets Headlines – beyondbrics / FT
 
TV: Bloomberg, BBC
Debt crisis: live – The Telegraph
The Euro Crisis Blog – WSJ
Tracking Europe’s Debt Crisis – NYT
FX Options Analytics – Saxo Bank
European 10yr Yields and Spreads – MTS indices

Asia Today: EUR maintains o/n gains; Soft Japan CPI tests the BOJSaxo Bank
After last night’s explosive EUR rally, Asia saw a mild correction in subdued activity but the single currency appeared to find support on the dips. Meanwhile, soft Japanese data is pressuring the BOJ to do more to stimulate the economy.


Market Preview: Focus on US GDP figuresSaxo Bank
European markets are expected to open firmer Friday as investor sentiment is buoyed following positive comments from ECB head Mario Draghi yesterday. Investors await the US GDP and German CPI due today.

Danske DailyDanske Bank (pdf)
Focus today will undoubtedly be on US Q2 GDP figures: we look for growth to be unchanged at 1.9% q/q (AR) from Q1 versus consensus of 1.5%...A weaker-than-expected GDP number today would  clearly add to fears of a prolonged global slump but should at the same time revive hopes of more Fed easing; hence this would not necessarily be a one-way street for risk appetite.


Morning Briefing: New perspectiveBNY Mellon
What should we make of Mr Draghi’s heavy hints of action?



EUROPE
Euro EuphemismThe Economist
Fran├žois Hollande is trying to wriggle out of Germany’s demand for more political union

How Much has Germany PROFITED from the Bailouts?TF Market Advisors

The World from Berlin: 'Germans Should Be Afraid' of Economic CollapseSpiegel
Moody's cut to the outlook of Germany's top credit rating came as a serious blow to the country's confidence this week. German commentators on Wednesday don't seem particularly surprised by the change, but warn of worse things to come

The hidden goal of Europe’s leaders. See it and then their actions make senseFabius Maximus
As the euro-crisis, now in its third year, grows in breadth and intensity, many analysts conclude that Europe’s leaders are stupid. Perhaps not.  Perhaps they pursue hidden goals.  Goals important to them, if not to Europe’s peoples.

EUROPE: ECB
Sceptics abound as Mario Draghi's ECB bond 'bluff' electrifies global marketsThe Telegraph
The ECB has opened the door to emergency support for the Spanish and Italian bond markets, setting off a blistering rally on bourses across the world.

Goldman Sachs: Broken transmission and non-standard ECB policyZH
(instead of SMP) The ECB may therefore look to support private-sector financing more directly, by further easing of collateral eligibility, increased liquidity support to the banking sector and outright purchases of private-sector assets originating in both the bank and corporate sectors.

EUROPE: PIIGS
The flight from SpainThe Economist
Spain can be shored up for a while; but its woes contain an alarming lesson for the entire euro zone

Europe’s troubled regions: Another weak link in the euro zoneThe Economist
The beleaguered governments in Madrid and Rome are battling with their highly indebted regions

Greek bail-out: Is “Grexit” at hand?The Economist
Greece has only a couple of weeks left to convince its creditors

The Spanish patientThe Economist
A full bail-out of the euro area’s fourth-largest economy is looming

Greeks Live in Dread of Troika VerdictSpiegel
Financial inspectors from the troika have arrived in Greece to draft their final report on whether the country has made enough progress with its austerity and reform efforts. But many Greeks have already lost hope and are counting on the worst -- an exit from the euro zone.

USA
Four Common Mistakes about the FedA Dash of Insight
The Fed is Sidelined by the Upcoming Election - The Fed Acts Based Upon the Stock Market - The Fed is Out of Ammunition - The Fed Knows the Employment Data

Chuck Norris Central Banking Promoted by Fed OfficialMacro and Other Market Musings
The ability of the Fed to shape expectations such that the market does most of the heavy lifting has become known among Market Monetarist as the Chuck Norris effect.

In Case Of Collapsing Earnings, Expand Multiples And PrayZH
The correlation between the S&P 500 in the last two years and the P/E multiple shows that performance has been driven almost entirely by multiple-expansion alone. Forward P/E is now getting close to recent peaks suggesting the market is far from cheap and on a longer-term view (based on both an as-reported and operating basis), the S&P 500 appears expensive