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Thursday, February 21

21st Feb - US Open: 1500! Europe's recession to continue!

Again bad PMI-numbers from Europe. Seems the recession is set to continue in the first quarter as well. EURUSD sold off heavily, but now at medium-term target levels.

This is my 1500th blog post. Hope you have liked it so far!





Previously on MoreLiver’s:

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Roundups & Commentary
Frontrunning – ZH
Overnight: The Red Color Is Not A MalfunctionZH
The Lunch Wrap – alphaville / FT
Emerging N.Y. headlines – beyondbrics / FT
Daily press summary – Open Europe

Morning MarketBeat: Fed Spooks Investors; It Shouldn’t – WSJ
Broker Note Briefing – WSJ
FX Spin – Marc to Market
A Few Thoughts about LTRO II Prepayment – Marc to Market
Morning Briefing (EU/US): Slave to the rhythm – BNY Mellon
  To know about “currency wars” is to become part of it

EUROPE
Panic-driven austerity in the Eurozone and its implicationsvoxeu.org
Eurozone policy seems driven by market sentiment. This column argues that fear and panic led to excessive, and possibly self-defeating, austerity in the south while failing to induce offsetting stimulus in the north. The resulting deflation bias produced the double-dip recession and perhaps more dire consequences. As it becomes obvious that austerity produces unnecessary suffering, millions may seek liberation from ‘euro shackles’.

France must get serious about its financesThe A-list / FT
Brussels should request from Paris a serious plan for public spending cuts. The French 2013 budget adjustment was mostly based on tax increases. The government has announced that further consolidations would come from public spending cuts. This is however a rather weak commitment because President Fran├žois Hollande has not spelt out precise priorities, let alone targets. It is not enough to say that some government spending will be cut. France must say which and when.

Member states blamed for EU budget errorseuobserver
Member state authorities are to blame for the mismanagement of the EU budget, say euro-deputies who scrutinise EU funding.

Bulgaria succumbs to euro deflation curseThe Telegraph
Bulgarian prime minister Boiko Borisov resigned this morning after days of mass protests against austerity across the country. “I will not participate in a government under which police are beating people. Every drop of blood is a shame for us,” he said. “Our power was handed to us by the people, today we are handing it back to them.”

The pretence of transnational politics and why national parliaments still ruleOpen Europe

Berlin Tries Not to Fiddle, But Rome May BurnWSJ
What does Angela Merkel have to do with Italy’s elections, asks Christopher Emsden

Draghi will not join the 'currency war'Danske Bank (pdf)

'Gambling Away Trust': Fears Rise of a Berlusconi ResurrectionSpiegel
European Parliamentary President Martin Schulz has warned Italians against voting for Silvio Berlusconi in upcoming elections. He joins a growing list of leaders who are wary of the return of "Il Cavaliere." The worry is particularly pronounced in the financial world.

Spain and Italy: The Euro Crisis Gnaws at Europe's UnderbellySpiegel
The euro crisis may have dropped out of the headlines recently, but Spain and Italy would seem to be doing their best to bring it back. Real estate giant Reyal Urbis' bankrupcy has raised fresh concerns about Spanish banks and many fear that a Berlusconi election victory could drive Rome to seek emergency aid.

  PMI
Markit PMIs: Recession in Europe continuesTradingFloor
Juhani Huopainen: The February Purchasing Manager Indices for Europe confirm that the recession is not over. EURUSD news flow is now as bad as it can get, so time to go against the tide?

Euro-Area Manufacturing, Services Contraction WorsensBB
Euro-area services and manufacturing contracted at a faster pace than economists forecast in February as the economy struggled to recover from the deepest recession in almost four years.

Chasm opening between weak French and strong German economiesReuters
The schism dividing the euro zone's strong and weak economies deepened to include its core pairing in February as French firms suffered their worst month in four years in stark contrast to prospering Germany.

UNITED STATES
Fed divided – should we worry?Nordea

Take some chips off the tableHumble Student
I wrote that I had been watching the behavior of cyclical stocks for a signal that a correction may be starting and we may have seen that signal yesterday.

OTHER
One day, two minutes... Fed and BoE lean in opposite directionsTradingFloor
Neil Staines: Yesterday, the FX markets were strongly driven by the release of the latest monetary policy meeting minutes from the US and the UK. Both surprised in terms of their policy leanings with strong implications for their respective currencies.

Thursday MusingsMacro Man

IN FINNISH
Euroopan talous uuteen kasvuun aikaisintaan loppuvuonna 2013Jukka Oksaharju / Nordnet