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Friday, May 31

31st May - EU Open: More bad macro to come

Previously on MoreLiver’s:

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News roundup – Between The Hedges
The 6am Cut London – alphaville / FT
Emerging Markets Headlines – beyondbrics / FT
Asia Morning MoneyBeat: U.S. Stocks Looking Bipolar – WSJ
Europe Morning MoneyBeat: Calmer Day In Prospect as Nikkei Recovers – WSJ

3 Numbers to Watch: EZ inflation, jobless and US Income, OutlaysTradingFloor
European inflation and unemployment data will probably confirm that more monetary easing is required, while US personal spending and income should suggest that growth is still slow and quantitative easing dependency remains elevated.

Market Preview: Raft of macro data across Europe and US in focusTradingFloor
European markets are expected to open mostly higher Friday. Markets are likely to keep an eye on Eurozone CPI and unemployment data for further hints on the region’s performance. Additionally, a slew of US macro data will hold market interest.

Danske DailyDanske Bank (pdf)
We expect only a modest uptick in euro area inflation to 1.4%... It is also worth keeping an eye
Italian Central Bank governor Visco’s speech today to see if periphery countries are putting pressure on
the ECB to do more.

Paremmista luottamusluvuista ei mitään iloa * Mitä kuuluu BRICeille? * Tänään tietoa euroalueen inflaatiosta

Aamukatsaus – Tapiola (pdf)


ECB Preview: The end of monetary easingDanske Bank (pdf)
The likelihood of a deposit rate cut at the upcoming ECB meeting is close to nil and the chance that the ECB will move to negative rates at a later stage is very small. The ECB might present an ABS purchasing programme, but we doubt that they are ready to give details yet and if announced the programme might underwhelm. The most likely outcome is that Mario Draghi will deliver nothing but soft wording. If he wants to add further stimulus, a refinancing rate cut is the most plausible option.

Snapshot: where Fed officials stand on ending QE3MacroScope / Reuters

Japan: More Output, Less DeflationMarc to Market
Japan has released a number of reports early in the Tokyo session that show an economy seemingly on the mend and an easing of deflationary pressures. Ironically, the yen tended to weaken in response, whereas the dollar ostensibly sold off in North America after disappointing US data

Press Release: IMF Article IV Consultation with JapanIMF
2013 IMF Article IV Consultation Concluding StatementIMF

Is This China's 'Minsky Moment'?ZH
SocGen: Since 2009, China’s credit growth has outpaced nominal GDP growth in every quarter except one (Q4 11)… The increase in credit demand is disproportionally larger compared to the recovery in investment appetite so far. This raises the question whether activity growth will really follow and if so by how much?

There's a problem with the transmission....Coppola Comment
Not only does QE fail when damaged banks aren't lending normally, but it actually impairs the transmission mechanism itself. This might explain why QE seems to become less effective the more of it you do. It's like hard water. It gradually clogs up its own pipes.

Rethinking macroeconomic policy: Getting
Olivier Blanchard, Giovanni Dell'Ariccia, Paolo Mauro: The Global Crisis has shaken the consensus on how to run macroeconomic policy. Three years ago, the authors discussed this issue on This column takes a more granular look at new efforts to rethink macroeconomic policy. It takes stock of early results and provides a more detailed agenda for the key issues that should keep policymakers and academic macroeconomists busy in the next few years.

What does it mean to have "predicted the crisis"?Noahpinion
Since 2008, quite a lot of people have boldly claimed that they "predicted the crisis". Usually, the claimants use this "fact" to argue for the superiority of their economic school of thought, modeling approach, investing approach, or personal intuition. But what does it mean to have "predicted the crisis"?

Things That Make You Go Hhmm...Grant Williams / ZH
37 pages of goodies.

Euro-ovet sulkeutuvat yksi kerrallaan Henri Myllyniemi / US Puheenvuoro

Suomi ei saanut Kreikalta vakuutta HS
Kreikan uusi lainajärjestely on todennäköinen, koska valtion velkaantuminen kiihtyy