Thursday
European Business & Consumer sentiment surveys
ECB meeting: the first after the new year, so will they or won't they - or can they
BoE meeting
FOMC minutes from the December meeting that decided to start tapering in January.
Friday
US employment report - are enough jobs created to stick with the tapering schedule?
All week:
Watch emerging markets (FX, bonds, equity) for signs of sell-off. Could lead to slowed tapering by the Fed.
Previously on
MoreLiver’s:
2014 previews (updated!)
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EUROPE
Euro Supporter Credit
Suisse Joins Bears: Currencies – BB
Wanted: Crusaders
for 'More Europe' – WSJ
Political Leaders Facing Voters Who Are More Disillusioned With the
European Project
Cutting public
investment has consequences: house building – Mainly
Macro
Almost everyone agrees
that UK house prices are currently much too high, and
(partly thanks to you know who) getting higher. It is also clear that if you
cut back on supply, but pressures on demand remain, prices will rise.
In 2008, Icelandic
banks were too big to fail. The government’s rescue attempts had devastating
systemic consequences in Iceland since – as it turned out – they were too big
for the state to rescue. This column discusses research that shows how this was
a classic case of banks gambling for resurrection.
ECB preview - no need
for immediate action – Nordea
The ECB meeting this week should be fairly calm. We expect no changes to
the key monetary policy rates and no new unconventional measures to be in the
pipeline. In a Spiegel interview on 30 December, Mr Draghi said: “we see no
need for immediate action.
Markit December
Services PMI
French service sector
business activity falls at sharpest rate since June – Markit
Spain: Sharpest rise in
services activity since July 2007 – Markit
Italy: Business activity
falls again in December – Markit
German private sector expands at robust pace in December – Markit
Eurozone economic recovery accelerates at end of 2013 – Markit
UK: Strong growth of
service sector sustained in December – Markit
UNITED STATES
Treasury Yields Climb
to Highest Since 2011 as Tapering to Begin – BB
U.S. economic growth will
accelerate this year even as the pace of expansion remains sub-par almost five
years after the end of the recession, according to academic economists and
former policy makers.
*Strategies for
sustainable growth – Lawrence
Summers / WaPo
A growth strategy that relies on interest rates significantly below
growth rates for long periods virtually ensures the emergence of substantial
financial bubbles and dangerous buildups in leverage. The idea that regulation
can allow the growth benefits of easy credit to come without cost is a chimera.
FEDERAL RESERVE
A Weekend of
Fedspeak – Tim
Duy’s Fed Watch
Policymakers don't want to undershoot the recovery, but I don't sense
they want to overshoot either. That
points toward cautious withdrawal of accommodation. Pencil in somewhat stronger growth in
2014. Pencil in a steady reduction in
the pace of asset purchases until the program winds down at the end of the
year. Pencil in an extended period of
low rates. But also recognize that the
tide of monetary policy is now receding
Where Ben Bernanke
made a difference – Gavyn
Davies / FT
His personal impact can be mostly traced back to the fact that, unlike
any of his predecessors, he was an accomplished academic macro-economist, who
happened to have strong pre-dispositions about many of the challenges that
confronted him at the Fed. This was extraordinarily relevant during his second
term.
Central Banks Split
on Stimulus in 2014 as Fed Tapers – BB
The erosion of the
mostly synchronized stimulus that supported the world economy for the past six
years has investors anticipating a stronger U.S. dollar and weaker Treasuries.
Plosser Warns Fed
Shouldn’t Try to Offset Potential GDP Loss – BB
Efforts to use monetary policy to offset such permanent shocks and to
close what appears to be a gap will likely be ineffective and perhaps even
counterproductive
Rosengren Says Fed
Needs to Be Patient in Removing Stimulus – BB
With the inflation rate below target and the unemployment rate
significantly above target, we believe strongly that monetary policy makers
have the opportunity to be patient in removing accommodation
ISM Non-Manufacturing
Lowest Since June; New Orders Records First Contraction After 52 Months
Of Growth – ZH
Second Month of Slower Growth Than Expected – dshort
53.0 indicates slower expansion in December – Calculated
Risk
ISM Indexes and BLS Employment Report – Calculated
Risk
Weaker Than Expected
ISM Services – Bespoke
Stocks Slide To
Worst Start To Year Since 2005 – ZH
ASIA
Will the reforms
speed growth in China? – mpettis
I would argue that if China’s GDP continues to
grow annually at above 7% in 2014 and 2015, this will be precisely because Beijing did not implement
the reforms. Successful execution of the reforms, in other words, is exactly
why growth rates will fall sharply.
China’s audit of local governments exposed an increased reliance on shadow
banking, swelling the risk of default on 17.9 trillion yuan ($3 trillion) of
debt.
The year 2013 saw the Japanese economy turn the corner on two decades of
stagnation. And the future will become even brighter, owing to an emerging
consensus that long-term recovery cannot be achieved without a concerted effort
to increase workers' wages and bonuses.
HSBC China Services PMI
Composite data signals weaker rates of output and new order growth – Markit
China Services PMI
Crumbles To 2nd Worst Level On Record – ZH
China services industry
growth slows, confirms year-end cooldown – Reuters
OTHER
Four Drivers in the
Week Ahead – Marc
to Market
Significance of last week's price action * Interest rate differentials *
Central banks * Economic data
The risk of
catastrophic success – Humble
Student
If these charts of inflationary expectations all start to undergo an
uptrend, then the risk of a dramatic rise in volatility in stock prices will
rise as expectations transition from slow growth to overheating.
PURCHASING MANAGER INDICES
World's manufacturers
drive global growth – TradingFloor
A preliminary look at
our global PMI tracker suggests that the world's manufacturers have ramped up
activity. This is expected to translate into overall higher global
growth in line with my 2014 forecast.
All The World's PMIs
In One Chart – ZH
Business Cycle
Monitor – Danske
Bank
Global leading indicators point to increasing activity. We expect the global
recovery to stay close to trend growth in Q4 but move up a gear during 2014.
Global Services
Sector Data Show Sluggish Growth – WSJ
FINNISH
Suomi joutunut outoon seuraan – rinnakkain
Ranskan kanssa – Verkkouutiset
Suomen
taloustilannetta on verrattu Ranskaan, eikä se ole kohteliaisuus.
Kauko Juhantalon mukaan nykyhallitus ei
tuntenut lainsäädäntöä
– Verkkouutiset
Juhantalon mukaan "vielä tänäänkin on
syytä monen, monen johtavan poliitikon pitää suunsa kiinni ja suojella omaa
etuaan. Jotain on Suomessa sellaista tapahtunut, että meillä on hyvin
varakkaita johtavia poliitikkoja, johon (varakkuuteen) ei pelkästään palkkatuloilla
voi päästä".