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Monday, February 25

25th Feb - US Open: First Italian numbers soon

Expect first exit polls after the voting is concluded at 14:00 GMT. See my Special for coverage. I'm skeptical: The Bersani-Monti coalition probably wins, but will they be able to govern the country and push through reforms and austerity with GDP seen dropping again in 2013? I think the government will stand for six months or so. EURUSD long bias for now, sell later when people again get very happy.

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Roundups & Commentary
Frontrunning – ZH
Overnight: Pricing In A Favorable Italian Election Outcome – ZH
The Lunch Wrap – alphaville / FT
Emerging N.Y. headlines – beyondbrics / FT
Daily press summary – Open Europe
  First day of Italian elections sees sharp decline in turnout; Beppe Grillo’s final election rally draws a crowd of around 800,000

Morning MarketBeat: Stocks Set for Correction? Think Again – WSJ
Ten Things that should be on Your Radar Screen This WeekMarc to Market
Morning Briefing (EU/US): Crisis? What Crisis? – BNY Mellon
  Thoughts on Moody’s downgrade of UK sovereign debt

Austerity, Italian Style Krugman / NYT

Will Irish & Portuguese bailouts get Greek treatment?Brussels blog / FT
The document – obtained by the Brussels Blog under the condition that we not post it on the blog – makes pretty clear that while an extension might help smooth “redemption humps” that now exist for Ireland (lots of loans and bonds come due in 2019 and 2020) and Portugal (2016 and 2021), it’s not a slam dunk case.

Cyprus bailout in sight as new president electedeuobserver
EU officials have welcomed the election of conservative leader Nicos Anastasiades in Cyprus, raising hopes of a speedier bailout deal for the troubled euro country. Anastasiades won 57.5 percent of the vote on Sunday

Cyprus is a small island, they DSA things differently therealphaville / FT
A simulation of how the Troika might carry out a debt sustainability analysis (DSA) for Cyprus. It’s pretty epic, and we don’t just mean that Sterne finds the debt unsustainable under the IMF’s “So Italy’s sustainable, right?” definition of sustainability for eurozone sovereigns

Moody's downgrades UK rating from AAA to Aa1Danske Bank (pdf)
UK downgrade rounds off EU's Black Fridayeuobserver

‘This downgrade is nonsense!’alphaville / FT

Will the bears get their second wind?Humble Student
While I am leaning slightly bearish because of negative technical conditions (see J.C. Parets' analysis on negative divergences and the signal from insider selling), I have to respect the upside potential posed by a couple of major market moving events this week.

America’s Sequestered RecoveryProject Syndicate
The US is facing another round of cuts in federal spending, this time threatening to trim at least 0.5 percentage points from GDP growth and to precipitate a loss of at least one million jobs. Automatic across-the-board spending cuts, or the “sequester” as it is commonly called, are the gravest current threat to America's recovery.

Kuroda! The BoJ’s goldilocksalphaville / FT
This Monday edition of rising Japanese equities/weak yen is brought to you by Haruhiko Kuroda, president of the Asian Development Bank and according to various media reports, the likely nominee for Bank of Japan governor.

Drop due to seasonal distortionsDanske Bank (pdf)
Reasons to be down, reasons to be cheerfulbeyondbrics / FT
The circusalphaville / FT

Global Macro Views: Beware of US soft patchDanske Bank (pdf)

Key Macro Events In The Coming WeekZH

Talouden näkymä: vastatuulesta tyveneen?EK
Euroopan komission viime perjantaina julkistama ennuste kertoo, että talouden pahin vastatuuli on Euroopassa helpottamassa. Valitettavasti myötätuulta ei ole vielä luvassa. Synkimmät rahamarkkinoiden toimivuutta, jäsenmaiden julkista taloutta ja koko euroalueen koossapysymistä koskeneet uhkakuvat eivät ole toteutuneet, mitä voitaneen pitää sinänsä jo hyvänä asiana.

Parkkonen: Rumalta näyttääIL

Jatketaan vielä samasta asiastaHannu Visti
Edellinen kirjoitukseni Euroopan sosiaalisesta kriisistä toi kommenttikeskusteluissa esiin viimein sen, mikä asioiden korjaamisen tiellä oikeastaan on. Samasta asiasta on saatu tältä saarelta taas viikonloppuna uutta materiaalia.