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Thursday, October 25

25th Oct - US Close: Yen and Yawn

Is this Europe's "believe me"? Source: The Big Pictur
Apple posted earnings that were clearly below expectations. Right after taking a hit with Google, hedge funds are now hit on both two of their favorite holdings. I guess there might be the usual talk of redemptions, risk aversion and liquidity tightening by prime brokers as vol is up & price down. All of these could be seen causing selling pressure. Participants are trading the QQQ while the Apple's trading is closed - just as they did with Google. All this proxy trading and so on is good for - you guessed it - creating selling pressure.

And as the market anticipates selling pressure, it has already taken the prices to those perceived lows. Perhaps we are already near those lows. Now all it takes is one good economic figure to turn the situation around and make people forget bad Q3. People need to believe in Q4, like they've never believed before.

By the way, today's durable goods orders looked good, but almost all the "improvement" was just catching up or military spending. Hardly a victory over the evil Q3. If you have too much time, notice what the Japanese yen has been doing lately. As long as I can remember, buying USDJPY around 80-85 and selling arond 120-130 has been an easy way to make money. Currently 80.35, next stop 83.
Previously on MoreLiver’s:

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Roundups and Commentary
Markets – Between The Hedges
The Closer – alphaville / FT

Tomorrow’s Tape: Q3 GDPWSJ
European Summary: Spanish Stocks And Bonds Bleeding Into The Close – ZH
US Summary: The QEternity 6 Week Scorecard: C Minus – ZH

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
Economic Calendar – Forexpros

A Finnish parallel currency is imaginableFT
For while Finland has not created much drama, precisely because it is one of the strongest eurozone members, some fascinating discussions are under way. Most notably, as the eurozone crisis rumbles on, some Finnish business and government officials are quietly mulling the logistics of leaving the currency union.

Weakness the Eurozone credit growth persists; stark contrast with the USSober Look
The stagnation in lending is in part due to banks deleveraging in order to improve capital ratios for Basel III. But a big part of the issue is simply lack of demand from borrowers.

Time already to switch off the sterling printing presses?MacroScope / Reuters
Commentators see today’s better-than-expected GDP number as a precursor to end of massive QE

The battle of the budgetThe Economist
Why the epic fight over EU spending is a wasted opportunity

Sovereign CDS: Messenger shot, message not The Economist
A ban on insuring against European defaults has unintended consequences

What Do Spain And Greece Have To Look Forward To? SocGen Answers: "Not A Lot"ZH
SocGen: The moribund growth backdrop also begs the question what palpable difference any relief over Spain or Greece (if it comes) will do to the long end. The answer is probably not a whole lot.

Spain’s fiscal woes: State of denialThe Economist
When a bail-out for Spain arrives, it is likely to be prolonged

Spain’s funding problems are overalphaville / FT
Spanish treasury minister states 2012 funding needs are covered, but buffers were down from €40bn in May to €16bn in August – and then there will be 2013.

Ireland: Troika Statement on the Review MissionIMF

Portugal: Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of UnderstandingIMF (pdf)

Portugal: Fifth Review Under the Extended Arrangement and Request for Waivers of Applicability and Nonobservance of End-September Performance CriteriaIMF

Still The Scariest DataTim Duy’s Fed Watch
The core manufacturing data stands out as an aberration.  While arguably a recessionary indicator, it also comes at a time of an improving housing market.  It would be unusual, to say the least, to experience a recession when housing is trending up.  Moreover, I remain skeptical that trade channels are sufficient to trip the economy into recession.  Still, I can't discount the recession threat entirely; to do so would be ludicrous in the face of the looming fiscal cliff.

Economists revise down third quarter U.S. GDP forecasts as business investment missing in actionMacroScope / Reuters
JP Morgan: Don’t let the headline fool you: the September durables report was a big disappointment.

Today's Economic Reports Bring A Sigh Of Relief The Capitalist Spectator
Today's updates on jobless claims and durable goods orders bring good news, or at least good relative to the worst fears inspired by recent data points in these series.

Japan’s very own fiscal cliffalphaville / FT
Japanese politicians are at loggerheads over a bill that would allow the government to borrow the Y38.3tn ($479bn) it needs to finance this year’s deficit.

G10 Weekly: Macro vs. market divergence to end?Nordea (pdf)
Macro vs. market divergence to end? * US – Earnings and economic momentum * USDJPY – Leaving the comfort zone *  RIX  – Our call for further easing is intact

Sugar Bottom Is ApproachingThe Short Side of The Long
Also a word on stock market and the level of financial stress

Global risk appetite still on the riseSober Look
The CS index is still below the early 2012 LTRO-induced euphoria, but is on the rise nevertheless.

EMEA Weekly: Week 44Danske Bank (pdf)
CNB to cut to zero and more to come

Eurokriisissä peli koveneeBrysselin Kone / YLE
Brysselin koneessa haastateltavana on perussuomalainen EU:n federalisaatiota vastustavan EFD-ryhmän jäsen, europarlamentaarikko Sampo Terho. Hän on ainoana suomalaismeppinä Europarlamentin talous- ja raha-asioiden valiokunnan täysjäsen, ja siis hyvällä näköalapaikalla eurokriisin suhteen. Miten tilanne hänestä tulisi ratkaista?

Pääkirjoitus: Suomi vetäytyy, kun muu euroryhmä tiivistyyHS

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