Google Analytics

Friday, February 22

22nd Feb - US Open: All events surprise

Today's German IFO sentiment index surprised to the upside, though I see the numbers to be of mediocre quality after digging deeper behind the headline numbers. The repayments of LTRO2 were significantly less than expected (so the implicit monetary tightening by removing liquidity did not happen, and EURUSD sold off). The European Commission released its updated economic forecasts, and the numbers are grim. The 2013 will be spent in recession, just like 2012. And now all eyes on the Italian elections. Bunga bunga!

I'll try to post a "Best of the Week" and a Special on the Italian elections later today. Come back during the weekend for my usual posts.

Previously on MoreLiver’s:

Follow ‘MoreLiver’ on Twitter or Facebook

Roundups & Commentary
Frontrunning – ZH
Overnight: Dull Levitation Returns – ZH
The Lunch Wrap – alphaville / FT
Emerging N.Y. headlines – beyondbrics / FT
Daily press summary – Open Europe

Morning MarketBeat: Stocks Hit Pothole – WSJ
Dollar Consolidates After Big Week – Marc to Market
Morning Briefing (EU/US): Il ritorno di incertezza – BNY Mellon
  The end of the Italian election might just mark the beginning of a renewed period of uncertainty for the Euro-area

Ifo Business Climate Index Rises SharplyCESifo

Euro Slides As First LTRO-2 Repayment Less Than Half Expected ZH

Adjustment and growth in the euro area economies ECB
Benoît Cœuré, Member of the Executive Board of the ECB, Nova School of Business and Economics and the Banco de Portugal, Lisbon, 22 February 2013

The future of global economic governanceECB
Jörg Asmussen, Member of the Executive Board of the ECB, Hertie School of Governance, Berlin, 22 February 2013

Deficits: good marketing in a time of austerity?alphaville / FT
Let's take a moment for a high level overview of public debt-to-GDP ratios in the eurozone. If that's not your idea of fun, well, you probably wouldn't be reading FT Alphaville. Courtesy of a note by Lasse Holboell W. Nielsen of the Economics Research team at Goldman Sachs

Winter forecast 2013European Commission
The EU economy: gradually overcoming headwinds

Euro zone economy to shrink again in 2013, EU saysReuters
The euro zone will not return to growth until 2014, the European Commission said on Friday, reversing its prediction for an end to recession this year and blaming a lack of bank lending and record joblessness for delaying the recovery.

EU Says Euro Zone to Shrink in 2013 as Unemployment RisesBB
The 17-nation euro zone’s gross domestic product will fall 0.3 percent this year, compared with a November prediction of 0.1 percent growth, the Brussels-based commission forecast today. Unemployment will climb to 12.2 percent, up from the previous estimate of 11.8 percent and 11.4 percent last year.

Euro zone budget gap to fall despite recession, Spain to miss targetsReuters
Most euro zone countries will reduce their budget deficits this year even though the recession in the single currency area is likely to continue but some, like Spain, will badly miss agreed targets, European Commission forecasts showed on Friday.

Spain’s Deficit Widened to 10.2% on Bank-Rescue Cost: EUBB
Rescuing lenders including Bankia SA (BKIA) added 3.2 percentage points to the budget gap last year while rising unemployment and falling asset prices crimped government income, the commission said today. The deficit will narrow to 6.7 percent of gross domestic product this year before growing in 2014 to 7.2 percent -- more than twice its 2.8 percent target -- as temporary austerity measures expire.

Too early to decide on Portugal deficit deadline, EU's Rehn saysReuters
The European Commission said on Friday it was not the time to decide if it will give Portugal more time to bring down its deficit to below EU-mandated levels.

EU Commission could consider giving France more time on deficitReuters
The European Commission is considering giving France more time to bring its budget deficit below EU limits and will likely decide in May, the EU's top economic official said on Friday.

The EU's self-defeating approach must end now re-define
What we need at this point is a grand political bargain, and that is one that only Mrs Merkel can offer. We will require a period of five to ten years of adjustment in the European economies which needs to happen both in deficit countries as well as surplus ones not suffering from the immediate crisis. During the course of this adjustment, financial support needs to be made available at reasonable cost to the economies to provide political and economic space for structural reforms and medium-term fiscal adjustment.

Italy election: Why voters back Berlusconi, no matter whatBBC
To many in the outside world, Silvio Berlusconi is the clown prince of politics - better known for his bunga-bunga parties, outrageous comments and courtroom battles than for any obvious political nous.

Evidence from Italy shows that electoral reforms can often have the opposite effect of what is intendedeuropp / LSE

Italian elections re-open risk of EU crisiseuobserver
Italian voters are heading to the polls on Sunday and Monday in a closely-watched race that could bring the country to the brink of a bailout.

Weekly Credit UpdateDanske Bank (pdf)

Are rates mispriced or are investors missing something?alphaville / FT
The disconnect we've noticed between commodity fundamentals and forward rates appears to be popping up in other asset classes as well.

Yritystuet yhtä hautomista ja munimistaOlli Herrala / KL

Enbuske: Vain oma paska pyyhitäänTuomas Enbuske