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Tuesday, September 18

18th Sep - US Close

Markets continued being soft, but not dramatically so. Boring day - but we are approaching limits of the correction. Either the risk appetite shows up now - or the bad fundamentals takes the markets lower first. The Spanish 6% yields are worrying me - the eurocrisis could flare up again very quickly.

For full coverage of the two most important developments, see ECB Watch and Fed Extra.

Previously on MoreLiver’s:
17.9. US Close: Realization (I really liked this)

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Roundups and Commentary
Markets – Between The Hedges
The Closer – alphaville / FT
Tomorrow’s Tape – WSJ

Morning Briefing (Asia) – BNY Mellon
Tyler’s US Summary – ZH
  Consolidation, Covering, Or Capitulation?
Tyler's US Summary ZH

  Gold And Silver Outperform As Volumeless, Rangeless Equities Drift Lower

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

The OMT and ‘limits’alphaville / FT
“We will only buy the debt with the remaining maturity of three years and part of the conditionality will be that the maturity structure of the debt may not change so that they (governments) cannot put all the new debt in the short end of the market,”

Draghi Euro Humbles Thought Leaders Seeing End of UnionBB
Longer feature article – ok outline of the game.

Operation Adios Rajoy BeginsZH
Portugal's 10Y is now 70bps higher in yield in the last two days - notably back above an unsustainable 8% (at the same time as government revenues missed expectations - shocker).

“Future of Europe Group” presents federal proposalspresseurop
Ministers call for stronger EU foreign policy chiefeuobserver

What happens if America falls off the fiscal cliff?The Guardian
It already has – markets have partly priced in the automatic cuts. But Washington's partisan deadlock causes ruinous uncertainty

Great Tips-pectationsalphaville / FT
US 10-year Tips breakeven rates are surging, and talk of a revival in inflation expectations is, understandably, doing the rounds.

What do you Buy for the Country that has Everything?TF Market Advisors
But QE is not a good tool for increasing final demand. Sometime it can help, but with the current situation, I don’t think it will do anything, at least not for domestic final demand.

QE3 and Inflation ExpectationsMacroMania
good charts

US dollar during QEsASA

Morgan Stanley's Adam Parker: Behavioral Economics 101ZH
When will fundamentals matter again? We don’t know. Our guess is sometime between October earnings season and right after the US Presidential election. If not, our view that the market’s next double-digit move is down, not up, will be wrong by year-end, and we will have to moderate our stance or push out the timing of our expectations. We use a framework to establish our market view. The framework says earnings will be $99 for the S&P500, not the consensus view of $116.

Yield Forecast Update - Central banks take major steps to fight crisisDanske Bank (pdf)

Chinese/Japanese spat over islands escalatesKiron Sarkar / The Big Picture

Gold vs. InflationThe Big Picture
As Merrill Lynch pointed out earlier this week, “the link between inflation and gold is very limited.”

Oikeudenmukainen talousarvioHannu Visti
Jutta “posetiivarin apina” Urpilainen kehuu esittelemäänsä budjettia “oikeudenmukaiseksi”.

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