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| Source: BCA Research |
Spanish yields quietly moving up, after Madrid is seen backtracking on austerity and not calling for the bailout. Expect imminent supporting statements should the yields rise more. Tonight's post has plenty of material - most notably on the QE3. Commentary on Europe is turning negative: the ECB's conditional backstop is not seen to be enough without a good banking union - whatever that means. Also, QE glory is giving ground to the fiscal cliff in US and China.
For full coverage of the ECB’s
decision see my ECB Watch-post (continuously updated). For QE3, see Fed Extra.
Previously on MoreLiver’s:
Roundups and Commentary
News – Between
The Hedges
Markets – Between
The Hedges
Recap –
Global Macro Trading
The Closer
– alphaville / FT
Roundup – A
View From My Screens
Tomorrow’s
Tape – WSJ
Tyler’s European Summary – ZH
Europe Opens Week In the Red
Reference
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EUROPE
The Next Barroso… – Brussels blog
/ FT
a list of early contenders from each of the
major political families.
QE would be right for Europe, too – Wolfgang
Münchau / FT
The biggest danger for the eurozone right now
is a rapidly deteriorating economy
Italy’s political exceptionalism – its chronic inability to marshal coherent
governments backed by stable parliamentary majorities – is weakening Europe and threatening the eurozone’s
survival. More than electoral reform is needed: Italy requires
comprehensive institutional renewal.
The weakness of the euro area economies has
slowed imports and several countries, including some in the periphery, have
seen a pick up in exports…the financial account showed a net inflow of 18 bln
euros of combined portfolio and direct investment.
With the ECB taking on the characteristics of a
lender of last resort, the eurozone's acute crisis is over for now. But the
existential challenge – political agreement on the key elements of banking and
fiscal union – is only just beginning, and, unless it is met, the eurozone’s
financial disintegration will eventually resume.
Battle Between Germany and France Over Spain Bailout Application; Numerous EU Ministers At Odds Over Banking Union – Mish’s
Spanish bond yields are moving up:
Come on Mr
Rajoy, make that call… – alphaville
/ FT
Eurozone Survival Calendar – pinterest
nice
automated overview
A Swissie counterfactual – alphaville
/ FT
Somewhere in an alternate universe, where Switzerland’s central bank never introduced an exchange rate target for the euro…
the Swiss franc is trading at parity with the euro, say HSBC.
Discussion of
2011 Review of Conditionality – IMF
2011 Review of Conditionality - Overview Paper – IMF
Why
did I include these? Conditionality will be the key to Spanish aid (of
course it will end up like Greece, with constant games of chicken, but
at least in the beginning this is the playbook).
USA
Goldman On The Fiscal Cliff: Worse Before It
Gets Better – ZH
Getting Off the Zero Bound – Tim
Duy’s Fed Watch
I am thinking it would be very bad to be still
at the zero bound when that recession hits.
A few more QE3 thoughts – Free
exchange / The Economist
QE Extreme - When the Fed really put its neck
on the line – Saxo
Bank
What are the limitations of the Fed’s power? – Fabius
Maximus
They are independent only so long as they
retain the confidence of a majority in Congress. The Fed’s leadership has
to worry about institutional legitimacy of the Fed should they adopt radical
new policies that earn the enmity of one of the two major parties. That’s
the ultimate limitation on their actions.
Diminishing market reactions to unconventional
monetary policy – ASA
What's More Important - Growth Or Policy? – ZH
Morgan
Stanley: while monetary policy can
provide a temporary boost to valuations, in fact over medium-term horizons, it
is in fact growth that dominates the drivers of equity performance.
Central bank nostalgia and an equilibrium – alphaville
/ FT
JP Morgan: It is excess rather than gross money supply
that generates upward pressure on asset prices or prices of goods and services
in the economy.
ASIA
Central banks’ balance sheet expansion – ASA
OTHER
Price earnings ratios on parade – Abnormal Returns
FX Forecast Update: The euro downtrend has come
to an end – Danske
Bank (pdf)
Emerging Markets Briefer - September 2012 – Danske
Bank (pdf)
Corporate Bonds, ETF’s, and Feedback Loops – TF
Market Advisors
The ETF transmission mechanism – alphaville
/ FT
At a time when traditional dealers are being
squeezed by growing regulatory burdens — think Basel, TRACE and the Volcker
rule — the incentive to hold market inventory is diminishing.
IN FINNISH
Ei ole ollut eurojäsenyys
hyväksi edes Saksalle – tyhmyri