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Wednesday, July 3

3rd Jul - US Close: More Portugal

Previously on MoreLiver’s:

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Roundups & Commentary
News – Between The Hedges
Markets – Between The Hedges
The Closer – alphaville / FT
US: Dow Surges Despite Weak Data, European Crisis, And Military Coup – ZH

Germany: Household debt continues to declineDB Research

Germany: Wachstum durch WandelOlli Rehn’s blog

The religion of bribesLinkiesta / Presseurop
Corruption is a key factor in failure of the Eurozone countries facing economic difficulties. They are for the most part, Catholic countries, a religion that has always shown a higher tolerance for corruption than for other sins.

Euro Crisis Back? Someone Tell the Euro TradersWSJ

Macro Monitor: HungaryDanske Bank (pdf)

Poland: This is the end Nordea

Beyond PortugalLong Short / FT
The fun part of the eurozone crisis, if there is one, is that you never know where to look. After the Cyprus crisis three months ago, the hunt was on for the next small peripheral country that would create a headache. Slovenia was a popular bet. So, among some hedge fund managers, was the Netherlands, where house prices are dropping alarmingly. There was a frisson of concern about Croatia’s accession to the EU. But it turns out that the next country to administer a shock, two years on from its bail-out, is Portugal.

Portugal: Revisiting crisis backstop facilities in Q&ADanske Bank (pdf)
In the light of the PGB sell-off we revisit the current crisis backstop facilities in this

“Coalition’s hara-kiri”Presseurop
The double resignation of Finance Minister Vitor Gaspar and Foreign Minister Paulo Portas has seriously weakened the government of Pedro Passos Coelho and jeopardised the reforms negotiated with creditors, notes the Portuguese press.

Fears revive of Portuguese PSIEuromoney
The immediate panic over severe strains in Portugal’s coalition government in reaction to voters’ austerity fatigue is raising fears beyond a delayed restoration of market access.

Portugal: The Price of AusterityMacro and Markets
My view is that debt relief ultimately will be required. Perhaps the near-term risk to watch is deposit flight.  Deposits, which are down 10 percent over a year earlier, have been falling in line with assets as Portuguese banks delever.  What happens next could be the first real test of whether the precedents set in the Cyprus restructuring will cause meaningful contagion when the risk of restructuring rises.

The forgotten man of the eurozone returns to the headlines as Portuguese government struggles to stay afloatOpen Europe
Portugal has only met its deficit targets due to one-off measures while competitiveness adjustments have slowed and contingent liabilities remain a hidden risk. With the country on the cusp of an unsustainable debt burden any delays would likely be the final straw which pushes Portugal into needing some form of further assistance.

Fed Ready for September Taper After Shocking Market, Meyer Says – BB
Policy makers are ready to start tapering bond purchases in September after Chairman Ben S. Bernanke shocked markets by announcing a conditional timetable, said former Fed Governor Laurence Meyer.

Payrolls Could Share Spotlight with Global EventsWSJ
The calendar and global events are working against investors who hoped to take positions ahead of Friday’s June jobs report.

U.S. minimum wage hike would offer short-term economic stimulus: Chicago FedMacroScope / Reuters

Data Deluge: The Good, the Bad & the UglyWSJ

U.S. Exports to Europe Signal Turnaround As Euro-Zone Recession Abates – WSJ
Labor Market Strengthens in U.S. Even as Services Slow: Economy – BB
  ISM Non-Manfacturing Index
Indicates slower expansion in June – Calculated Risk
Crashes To Lowest Since February 2010, New Orders Devastated To July 2009 Levels – ZH
Slowest Growth Since February 2010 – dshort
Hits Lowest Level Since February 2010 – Bespoke
Service Industries Unexpectedly Grew at Slower Pace in June – BB
Service sector growth slows to three-year low in June: ISM – Reuters
U.S. June ISM Manufacturing Report on Business (Text) – BB

Japan: On The Path To Debt MonetizationBCA
According to our Bank Credit Analyst service, current Japanese policies will be insufficient to finally break deflation’s grip. The good news is that policymakers are not without options.