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Monday, July 8

8th Jul - EU Open: EURUSD signs of bottoming?

Daily chart - near range's bottom. Red vertical lines are ECB press Q&A days

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: Trade Talks Could Raise Heat on ChinaWSJ
Europe Morning MoneyBeat: Payrolls Still Dominate – WSJ
Rates morning comment – focus on the Fed in the week ahead – Nordea

3 Numbers to Watch: EU confidence, German output, US creditTradingFloor
The Sentix Investor Confidence update for June will offer guidance on the summer outlook for the Eurozone, followed by new numbers on German industrial production and US consumer credit.

Market Preview: EU confidence data and Draghi’s speech eyedTradingFloor
European markets are expected to open higher on Monday amid speculation that Greece will secure the last tranche of its aid package today. Meanwhile, traders will keep a tab on key economic releases in the Europe and Draghi’s speech later in the day.

Danske DailyDanske Bank (pdf)
Focus today will be on markets digesting Friday’s strong payrolls out of the US in light of what this means for Fed tapering its quantitative easing (QE) programme.... With major central banks now engaged in forward guidance we are currently in an environment where markets need to price a data-
dependent Fed exit contrasting with a time-dependent one from the ECB... Some uncertainty in Europe remains in place ahead of today’s Eurogroup meeting.

Valtiovarainministerit todennäköisesti sopuun Kreikan tukipaketista * Vahvat työllisyysluvut vetivät korot USA:ssa nousuun


How knowledge transmission should workmainly macro
The tenth anniversary of the UK’s 2003 decision not to join the Eurozone has just passed. With all my complaints about how bad macroeconomic policymaking has been recently, I thought it was worth analysing an example of a good decision.

Rationality and the EuroKrugman / NYT
Simon Wren-Lewis, for once, has a happy story to tell. He looks back at Britain’s fateful decision, ten years ago, not to join the euro, and argues that the decision was made on the basis of — gasp! — actual analysis.

Eurozone crisis over? Not by a long, long wayThe Telegraph
'The euro is no longer under existential threat,” Herman Van Rompuy said three weeks ago. “Financial stability has been restored.”

Weidmann: Monetary Policy Can’t Solve CrisisWSJ

Bundesbank Chief States the Obvious "ECB Cannot Solve Euro Zone Crisis"; Unstated Message "No One Else Can Either"Mish’s

The impact of the falling savings ratioTouchstone
Much of the current ‘recovery’ can be explained by a fall in the UK household savings ratio. Something I warned against last year.

Greece, Troika Optimistic on Reaching Deal Before MeetingBB
Greece, foreign lenders close in on deal to unlock aidReuters
Greece is likely to reach a deal with foreign lenders on its latest bailout review before a meeting of euro zone finance ministers on Monday to decide on further aid, EU and Greek officials said on Sunday.

Young Spaniards flock to Germany to escape economic misery back homeThe Guardian
With youth jobless rates at 50% back home, graduates are heading for Berlin – but still grumble about the weather

(Broke) Italy “Would Love To” But Can't Pay Its Bills This YearTestosterone Pit

Implied rate hike date moves to October of 2014Sober Look

The Chart That Housing Bulls Don't Want You To SeeZH
Pending home sales tend to drop (with a lag) following higher mortgage rates.

It's the risk premium, stupid!Humble Student
Bernanke knows exactly what he is doing when he hints about tapering in his public remarks. It's the risk premium, stupid! And it's going up.

Update: Four Charts to Track Timing for QE3 TaperingCalculated Risk
That Terrible TaperKrugman / NYT

Junk bonds outperforming other fixed income asset classesSober Look
With HY spread being a significant component of the overall yield, strong equity markets have kept yield increases relatively modest. If equities come under pressure however, all bets are off for HY.

The Reason For China's Epic 1 Trillion Yuan Deleveraging: The Biggest Housing Bubble In HistoryZH

Why Bonds Are Set To Bounce BackAsia Confidential
What then can we look for the second half of the year? Broadly, I expect deflationary concerns to take centre stage again as the U.S. economy stagnates, Japan intensifies currency wars and thereby exports deflation while Chinese GDP dips below 7% by the fourth quarter. This will take any talk of significant QE tapering in the U.S. off the table while Europe and Japan continue to provide ample liquidity amid weakening economies. China will be the only country tightening policy as it resists calls to reflate its credit bubble.

FX Comment: green shotsNordea

The Global Investment ClimateMarc to Market
1) The Fed has begun a protracted exit from the extraordinary monetary policy; while 2) other major central banks are not ready to follow suit. This is encouraging 3) an unwind of structural positions, that were predicated on low US interest rates, and 4) the replacement of the dollar as funding currency, which is leading to 5) portfolio adjustments away from fixed income, emerging markets and some commodities, including precious metals. The dollar, US and Japanese equities are favored by investors.

IMF May Cut Global Growth Forecast as Emerging Markets SlowBB
No Hockeystick-save Here: IMF To Slash Economic Growth Forecast... AgainZH
The IMF is scheduled to publish new forecasts later this week.

Do the inflationistas really believe what they say?Noahpinion
Crib Sheet: How I Work (Self-indulgent)Krugman / NYT

America's NSA 'in bed with' Germany and most others: SnowdenReuters
Snowden Interview: NSA 'In Bed Together with the Germans'Spiegel
In an interview, Edward Snowden accuses the National Security Agency of partnering with Germany and other governments in its spying activities. New information also indicates close working ties between the German foreign intelligence agency and the American authority.

GCHQ Surveillance: The Power of Britain's Data VacuumSpiegel
Britain's intelligence service stores millions of bits of online data in Internet buffers. In SPIEGEL, Edward Snowden explains GCHQ's "full take" approach. All data that travels through the UK is captured.

Ghosts of the NSA: Relics of Cold War Spying Dot GermanySpiegel
The National Security Agency has long been active in Germany, though much of its spying was conducted against the Eastern Bloc during the Cold War. Today, former listening stations and other facilities dot the German landscape.

Mining titans, movie moguls: Macau's junket operators branch outReuters
When junket operator Suncity opened its first high roller baccarat table at Steve Wynn's Macau casino in 2007 to lure China's wealthiest punters, the firm had fewer than 30 employees and no computers or equipment other than pen and paper.