EUROPE
EUROPEAN
CENTRAL BANK
ECB failed for the
second time this year to fully drain the market of the more than €170 billion
in government bonds it still holds under its previous bond-buying program.
Draghi Throwing Light on Banks Spurs
Fundraising Flurry – BB
Draghi’s plan to shine
a light on the balance sheets of euro-area banks is forcing lenders that are
short of capital out of the shadows.
The ECB is much too stodgy – Bruegel
The euro fuelled a
leveraged bet that went bad. The ECB is best positioned to orchestrate the
painful sharing of losses. If the ECB does not reinvent itself for the times,
it will be hobbled by its obsolescence and by increasingly acrimonious
politics. And the flawed euro project will be further damaged.
Rehabilitation could still hurt, AQR watch – alphaville
/ FT
Financials: What I learned at Davos – Morgan
Stanley
Euro area deflation monitor – Danske
Bank
The lower inflation is
not contradicting stronger growth in the euro area, in our view. Lower
commodity prices have increased purchasing power and the most recent decline in
core inflation is due to methodological changes and not a result of a drop in
wage growth. Real wage growth has shown a clear improvement from its previous
decline.
MACRO
NUMBERS
German GfK consumer
confidence indicator highest since 2007 – TradingFloor
Euro area monetary
developments Dec 2013 – ECB
Slump in euro zone
money supply growth highlights deflation risk – Reuters
Euro zone M3 growth
slows sharply, private loans contract – Reuters
UNITED STATES
FEDERAL RESERVE
FEDERAL RESERVE
The Fed’s policy
committee on Wednesday wraps up its latest meeting, Ben Bernanke’s last as
chairman. Expect full taper ahead and watch for changes to its economic outlook
and guidance about interest rates.
Fed officials are
likely to consider at their meeting this week whether to press forward with an
experimental program run by the New York Fed which is designed to give the
central bank with better control over short-term interest rates.
A new call for rev-repo to become the new
policy rate – alphaville
/ FT
To those who have been
watching the developments in the Fed’s fixed-rate full-allotment repo facility,
it won’t come as a bracing shock that the facility’s interest rate might
eventually be synced with the interest rate paid on reserves and supplant the
federal funds rate as the Fed’s new policy rate.
Yellen Faces Test Bernanke Failed: Ease Bubbles – BB
http://www.bloomberg.com/news/2014-01-28/yellen-faces-what-bernanke-greenspan-couldn-t-do-ease-bubbles.html
EM relief sets up Fed taper with no regrets – TradingFloor
Any market speculation
that the recent emerging-market turmoil would be sufficient to change the
FOMC’s mind on continuing to taper were thoroughly quashed by the lira’s
massive rally in the wake of a huge rate hike by the CBT.
FOMC preview – Danske
Bank
On autopilot for now –
tapering USD10bn per meeting with strong forward guidance
Suddenly Thrust into a Bind, Fed Might Well Opt
to Halt the Taper – WSJ
MACRO
NUMBERS
December Manufacturing
ISM Revised Lower, From Beat To Miss – ZH
EMERGING
GENERAL
GEM Currencies Oversold – Short Side
of The Long
GEM currencies have
been in a downtrend for almost 3 years * Weakness in GEM currencies can usually
mark a crisis low *
The EM line in the sand – Humble
Student
It seems that the
problems currently faced by selected EM currencies are due to local conditions,
e.g. the problems in Argentina are unrelated to the problems in Turkey, and the
risk of a global EM currency crisis sparked by Fed tapering is well under
control.
‘Fragile Five’ Is the Latest Club of Emerging
Nations in Turmoil – NYT
The long-running boom
in emerging markets came to be identified, if not propped up, by wide
acceptance of the term BRICs, shorthand for the fast-growing countries Brazil,
Russia, India and China. Recent turmoil in these and similar markets has
produced a rival expression: the Fragile Five.
Four Quick Points on Emerging Markets Turmoil – WSJ
The bounce in the
Turkish lira was very short lived * real rates are just too low in emerging
markets * in Latam, Argentina and Brazil at most danger * higher real rates and weaker
currencies needed
Carry Trade Doesn’t Shine in Emerging
Currencies – WSJ
CHINA
China’s Rescue of Troubled Trust May Stoke
Risk-Taking – Businessweek
China’s eleventh-hour rescue
of wealthy investors in a high-yield trust threatens to drive more money into
the nation’s $6 trillion shadow-banking industry, undermining regulators’
efforts to deter excessive risk-taking.
Biggest Money Fund
Shuns Companies on Default Risk – BB
Chinese Homebuyers
Thronging Sydney Make Mini-Bubble Frenzy – BB
TURKEY
Turkey - helping the lira, killing the
economy? – Danske
Bank
Turkey Gets Aggressive on Rates – WSJ
Significant Tightening
Follows Extraordinary Meeting Called to Combat Lira's Slide
Turkey - Das Boot – MacroMan
Turkey Central Bank
Intervention Halflife 12 Hours As USDTRY Roundtrips – ZH
Turkey Raises Rates to End Lira Fall as Basci Defies Erdogan – BB
Turkey raises rates
aggressively – FT
Turkey tightens:
implications of its aggressive rate rise – FT
Turkey and India lead
EM central bank fightback – FT
Asian markets rally on
EM banks’ moves – FT
EM bonds: lifting
weights – FT
Intervention Now
Fully Faded As Lira Collapse Returns – ZH
Turkey’s Lira Reverses Course as Rate-Hike Effect Wears Off – WSJ
Turkey’s central bank: orthodox, really? – beyondbrics
/ FT
South Africa raises rates to 5.5% - beyondbrics
/ FT
South Africa Did What? – WSJ
SA rate hike: more
than just inflation concerns? – beyondbrics
/ FT
South Africa hikes rates but rand weakens – beyondbrics
/ FT
OTHER
Central Station: What Do Turkey and the Fed
Have in Common? – WSJ
Bond update: trouble ahead for EM currencies – TradingFloor
In spite of recent EM
turmoil, markets are confident the US Federal Reserve will continue the
tapering of its monthly bond purchases tonight.
The IMF is Courting New Risks with a Change in
Policy on Debt Restructuring –
PIIE
2014: The year of emerging emergency – TradingFloor
Emerging markets got
into trouble when the Fed first mentioned the taper. But now that the turmoil
has become widespread and is beginning to affect developed economies' asset
prices, a peep behind the curtain does not reveal a pretty sight.
FINNISH
Demarit
hermoilevat, syystä – Vesa
Varhee / TalSa
Sosiaalidemokraattisen puolueen johto alkaa
olla hermona. Ylen joulukuisessa mielipidemittauksessa Sdp oli puolueista
neljänneksi suurin. Hallituskauden saavutukset ovat vähissä. Eduskuntavaalien
kampanjointi alkaa noin puolen vuoden kuluttua ja se kaipaa kannatusta nostavia
ideoita. Kahden Sdp:n ministerin tuoreet avaukset eivät anna kovin rohkaisevaa
kuvaa puolueen todellisuuden tajusta.
Turkki
korotti keskuspankkikorkoa – mutta miksi – Tyhmyri
Yrityssaneerauksien määrä kasvoi 13,2
prosenttia vuonna 2013 – Tilastokeskus
Konkurssien määrä kasvoi 5,7 prosenttia vuonna
2013 – Tilastokeskus