Follow ‘MoreLiver’ on Twitter
EUROPE
Analysis: Euro zone
- reasons to be wary in 2014 – Reuters
EU elections, bank stress, German court, reform zeal, deflation.
German party
manifestos are increasingly likely to downplay European issues and reflect
negative attitudes toward the EU – Europp
/ LSE
Danish central bank Governor Lars Rohde said most of the nation’s
households would survive a jump in interest rates or a loss of income as Denmark tops world debt
rankings.
Crisis Management: Europe Eyes
Anglo-Saxon Model with Envy – Spiegel
Should the ECB follow the Anglo-Saxon model and buy up vast quantities of
sovereign bonds in attempt to finally overcome the euro crisis? ECB head Mario
Draghi is under pressure to act now. But what are his options?
CRISIS COUNTRIES
Periphery business
cycle monitor – Danske
Bank
Euro area periphery data continue their improvement and in line with
this sovereign spreads have tightened further.
Eurozone fund chief
dashes Greek hopes for debt deal – euobserver
There will be no debt restructuring," Regling said. The ESM is Greece's largest creditor,
with €133 billion in 30-year loans already disbursed at an interest rate of 1.5
percent.
The next sudden stop – voxeu.org
Financial crises are generally preceded by credit booms and a build-up
of external debts. Although it is unclear whether Turkey is experiencing a
financial bubble, as of 2013, 58% of the corporate sector’s debt was
denominated in foreign currencies. This column argues that this explains the
Central Bank of Turkey’s interventions to
prop up the value of the Turkish lira. Given the relatively low level of
reserves and the unfolding corruption scandal, it is a critical question how
long the Bank can continue to do so.
MACRO NUMBERS
Core inflation in EZ
0.7% in December, lowest on record
Euro area annual inflation down to 0.8% - Eurostat
Euro zone inflation drops unexpectedly in December – Reuters
Europe's flashing red lights of deflation – TradingFloor
Disinflation Trend That Should Keep Mario Draghi Up At Night – BI
*Mr. Draghi Plays Chicken With Deflation – WSJ
Surprise drop in euro zone inflation shows deflation risk – Reuters
German Unemployment Drops as Euro-Area Inflation Slows – BB
UNITED STATES
Lew Will Push EU to
Avoid Race to Bottom on Finance Rules – BB
Treasury Secretary
Jacob J. Lew will press European officials to follow the U.S. lead in adopting tougher banking regulations
to ensure that American financial firms aren’t put at a competitive
disadvantage.
Macro Implications of
Extending Emergency Unemployment Compensation – Econbrowser
Yield Chasing Never
Ends Well – Even in Equities – The
Reformed Broker
FEDERAL RESERVE
How Divided is the
Fed?
– Tim
Duy’s Fed Watch
What I am watching for in the minutes - signs of division. Division on the forecasts themselves will
make it hard to agree to a successor to the Evans rule. Divisions on the reaction function will make
it even harder.
5 Things Yellen Will
Face in Her Regulatory Agenda – WSJ
Janet Yellen, who could be confirmed as chairwoman of the Federal
Reserve as soon as today, will have her hands full trying to unwind the central
bank’s programs for stimulating the economy. But that’s just the beginning of
her new challenges. As the regulator of the largest U.S. financial
institutions, including those most likely to pose risks to the economy as
whole, the Fed also has a host of regulatory issues on its agenda.
MACRO NUMBERS
Trade Deficit decreased in November to $34.3 Billion – Calculated
Risk
Trade Deficit Slides 13%, Lowest Since October 2009, Exports Rise To
Record – ZH
Trade deficit smallest in four years; imports weak – Reuters
US Trade Balance
Improves, Net Exports to Help Q4 GDP – Marc
to Market
CoreLogic: House Prices up 11.8% Year-over-year in November – Calculated
Risk
ASIA
While China’s opening
to the outside world has enabled it to achieve astonishing economic progress
over the last three decades, the country might now have reached a level of
income at which the problem is no longer “too little market.” On the contrary,
some of China’s key problems today require more government intervention.
Great Graphic: Yen
and Nikkei – Marc
to Market
SAXO BANK Q1 INSIGHTS
Steen Jakobksen: Emerging
Asia, the erstwhile saviour of the West in the
global financial crisis, is set to tumble in 2014. But take heart, this is a
structural necessity that marks the beginning of the end.
Commodity Outlook: A
time of plenty – TradingFloor
A surfeit of supply is
the common thread in commodity markets. With agricultural warehouses brimming,
more oil being pumped and metals extraction zipping ahead, prices will be under
pressure in 2014 unless sustainable growth can be achieved.
Macro Outlook: Steady
as she goes – TradingFloor
Mads Koefoed: Expect
the US to lead growth prospects in 2014 as a rise in
households’ net worth helps to propel the economy forward. But if you’re a
French bull, rein in your horns — it looks nasty.
Forex Outlook: Full steam ahead – TradingFloor
John J Hardy: The taper
calendar is set for the New Year after the Fed’s December meeting and Q1 will
see a concerted effort to wean the forex market off quantitative easing.
Equity Outlook: Going
up –
TradingFloor
Peter Garnry: Don’t
pay any heed to those who say equities are in a bubble. If you really want to
make the most of your portfolio in 2014, the biggest risk is not being long
enough on risky assets.
OTHER
January Sentiment
Summary – Short Side
of Long
Managers exposure towards equities resembles group think * Retail
investors continue to pile into global stock markets * Nasdaq speculators continue
to maintain elevated bullish bets * Volatility Index is coiling into a
compressed decision point…* Household exposure to stocks has risen to levels of
2007 top * Bund funds are experiencing a 7th consecutive monthly outflow * Speculators
are once again pressing Treasuries with shorts * Funds continue to shun
commodities as downtrend persists * Agricultural exposure is at one of the
lowest levels in years… * Speculator are holding net long positions on the US
Dollar * Hedge funds remain bearish on the overall PMs sector * Silver’s
sentiment is now at one of the lowest levels in decades
Commodities Update:
The polar vortex heats up markets – Danske
Bank
A polar vortex has hit the US, bringing freezing
temperatures all the way down to the southern states. The hard wind chill and
heavy snowfall has created an urgent demand for energy to heat up houses, putting
imminent pressure on natural gas supplies. Consequently, natural gas spot
prices have soared.
The extreme winter weather has also spurred worries over the possible
effects on winter wheat and citrus crops, sending grains and juice prices up
The scientist's
approach to FX in 2014 – TradingFloor
As the markets start
again for 2014, the overall macro themes that were dominant at the end of last
year are likely to persist with US tapering, eurozone deflation, the UK recovery and the relative success of Abenomics
all key.
FINNISH
HS ja Kilpailuvirasto saavat kyytiä
ministeriltä – KL
S-ryhmän ja
S-etukortin joutuminen Kilpailuviraston syyniin ei miellytä kaikkia
ministereitä.
Pankkiunioni tulee – pidä kiinni lompakostasi – Sampo Terho
Asuntolainojen nosto hiipui – Verkkouutiset
Asunnonostajille ilouutinen: Lainamarginaalin
kasvu pysähtyi – TalSa
Asuntolainojen
korkomarginaalin kasvu pysähtynyt syksyn aikana – Suomen
Pankki
"Suomelle jää Musta Pekka käteen" – TalSa
Asiantuntijat
uskovat euron heikkenevän tulevaisuudessa, mutta tarkempi ajankohta jakaa
mielipiteitä. Heikompi euro olisi mannaa Suomen viennille.