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Monday, February 18

18th Feb - EU Open: European Denial

Previously on MoreLiver’s:
Weekender: Off-Topic (not markets-related!)
Weekender: The World (Europe, US, Asia)
Weekender: Weekly Support (weekly briefings)
Weekender: Best of the Week (from my last week’s posts)

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The 6am Cut London – alphaville / FT
Emerging Markets Headlines – beyondbrics / FT

Market Preview: EU current account and Draghi's speech in focusTradingFloor
With a light global economic calender, European markets are expected to open mostly lower Monday. Today's Eurozone current account data and PMI and sentiment indices data in Europe due later in the week are likely to hold market interest.

Danske DailyDanske Bank (pdf)
G20 meeting ended without any direct criticism of Japan’s expansionary policy. USD/JPY is back at 94 and the Nikkei index is up close to 2%. Today should be fairly quiet with only  tier-2 data and  the US closed for Presidents’ day but keep an eye on ECB president Draghi’s speech at the European Parliament.

AamukatsausNordea (pdf)
Likviditeetin väheneminen nostaa korkoja euroalueella * Luottamusluvut paranemassa euroalueella  Italian vaalit uhkaavat markkinarauhaa * USA:n vahvat luottamusluvut tukivat EURUSD:tä ja riskinottoa korkomarkkinoilla

AamukatsausTapiola (pdf)
Wal-Martin heikko myynnin alku helmikuussa säikäytti osakemarkkinat viime viikon lopuksi. Japani ei joutunut valokeilaan G20-maiden kokouksessa, jeni heikkenee jälleen ja maan osakemarkkina lentää. Markkinoita liikuttavaa makrodataa alkaa tulemaan keskiviikosta alkaen, alkuviikko hiljainen. Tuloskauden raportointi rauhoittuu tällä viikolla, tänään raportin Ilkka klo 15.00. Osakefutuurit hieman plussalla, indikoiden nousuavausta pörssiin.


TPG-Backed Saxo Bank Says Euro Doomed as Currency Woes ResurfaceBB
Lars Seier Christensen, co-chief executive officer of Danish bank Saxo Bank A/S, said the euro’s recent rally is illusory and the shared currency is set to fail because the continent hasn’t supported it with a fiscal union. “Right now we’re in one of those fake solutions where people think that the problem is contained or being addressed, which it isn’t at all.”

No debate please, we're EuropeansNot The Treasury View
But of course the really surprising thing is that Mr Rehn should be writing to Finance Ministers, and the IMF Managing Director, complaining that an academic paper on a very policy-relevant, but highly technical issue of empirical macroeconomics, represented "debate which has not been helpful".

Making the European Monetary
Recent policy and academic debates have begun to influence Eurozone reform. But how sound is the advice we give out? This column argues that calls for a Eurozone or full-fledged EU superstate are overstated. Yes, developing an adequate system of European banking supervision is a matter of urgency if we hope to tackle the threat posed by an overdeveloped and opaque financial system. But calling for a superstate misunderstands the reasons politicians introduced the euro in the first place.

Of fish, flowers, AKs, offshore banking, and now horsemeatFistful of Euros
Big depositors, you say? And who might they be? I think it is fair to say that nobody is particularly keen to bail out Viktor Bout or Horsemeat Guy. As a result, it’s politically very possible that the whole idea of a bail-in might get tested. And whether it does, and the exact terms, are increasingly linked to things like “how far into the maze the journalists get” and “whether Richard Chichakli starts singing in jail”.

Now for the second big oneNordea
The other bigger one-time repayment of ECB 3-year loans will take place next week, when the second 3-year LTRO will have its first repayment date. The repayment interest is likely to come below the EUR 137bn seen in the first operation.

Update: Recovery MeasuresCalculated Risk

Stan Fischer saved Israel’s economy. Can he save America’s?Wonkblog / WP

Stanley and the CraziesKrugman / NYT

Biases, Biases EverywhereZH
Goldman Sachs: Biases creep into the investment process at two important stages: when forming estimates and the investment decision.

FX Comment: Eyes wide shutNordea
Big chance for EURUSD to rebound above 1.3300 as the European numbers confirm EMU recovery this week...

The Importance of the G20: Not What You ThinkMarc to Market
There was something important coming from the G20 meeting, but it is not the currency wars that have captured so many imaginations in the media and blogosphere. It was about corporate taxes, but before turning to it, let's try to put the currency statement in perspective.

"Great Rotation", OverZH
As Goldman Sachs' funds flow and positioning monitor shows

Investing in a Low-Growth WorldJohn Mauldin / The Big Picture
Jeremy Grantham: Courtesy of the above Fed policy, all global assets are once again becoming overpriced. This reminds me of the idea sometimes attributed to Einstein that a workable definition of madness is constantly repeating the same actions but expecting a different outcome! But, as always, asset prices are not uniformly overpriced: emerging markets and, we believe, Japan are only moderately overpriced. European stocks are also only a little expensive, but in today’s world are substantially more risky than normal. The great global franchise companies also seem only moderately overpriced.