8th Jan - FOMC minutes ahead

Later today (19:00 GMT) we get the minutes from the Federal Reserve's FOMC December meeting, which deciced to commence tapering in the current month. Do they agree? Who disagreed? What's next?

Previously on MoreLiver’s:

Tuesday: EZ disinflation, recovery elsewhere

Monday: PMIs mixed, eventful week ahead

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EUROPE

Scotching the Eurozone – Project Syndicate

Conventional wisdom suggests that Scottish independence is possible, albeit not very likely, while any country’s departure from the eurozone is fanciful. But the monetary decisions that a newly sovereign Scotland would have to make are at least as likely to be faced by some eurozone countries over the next couple of years.

A consistent trinity for the Eurozone – Marco Buti / voxeu.org

First, sound fiscal policies need to be conducted while keeping sustainable welfare systems. Second is the conflict between policy objectives and economic realities – vulnerable economies cannot reduce their debts and simultaneously gain competitiveness. Third, financial stability and integrated financial markets cannot be established unless the relationship between banks and their sovereigns is reformed.

Is Europe Growing Together or Growing Apart? – Bank of Finland

While a core group of countries may be developing together, there appears to be at least seven identifiable groups of countries with different growth dynamics…These results provide awkward implications for policy, particularly for those who thought that simply having a union would draw countries closer together (endogenous OCA criteria)

Why Reinhart and Rogoff are Wrong About the Eurozone’s Debt Structure and the Costs of Debt Mutualisation – Yanis Varoufakis

It is a serious mistake to identify debt mutualisation with jointly and severally guaranteed Eurobonds. For there is another mechanism by which to mutualise debt and substantially reduce the Periphery’s aggregate debt without incurring any costs upon countries like Germany.

U.K. House Prices to Extend Gain as Loan Access Eases – BB

  BANKING UNION

EU Puts Banking-Union Credibility on Line in Talks – BB

Analysis: America to Europe: Stronger banking union would help boost growth – Reuters

Lew’s comes to Europe airing concerns – MacroScope / Reuters

The United States has a message for Europe: If you want to help your ailing economy, consider pledging taxpayer money from across the euro zone to help troubled banks.

  EUROPEAN CENTRAL BANK

ECB Preview: Still pressure from low inflation – Danske Bank

Pressure on the ECB to ease further, but we expect it t0o refrain from cutting rates…likely to ease monetary policy further in April due to a new drop in inflation and core inflation

Turning Japanese – Long Short / FT

The ECB is dithering about taking radical action, such as negative interest rates or the QE which Japan is now using in an attempt to devalue its way to growth. The ECB thinks inflation will rise again next year. If it does not, investors must hope the central bank steps in before deflation becomes a serious threat.

ECB preview: Talk is cheap — expect little concrete tomorrow – TradingFloor

I expect the ECB to refrain from any concrete action at the January meeting of the governing council despite the recent tick down in inflation.

Will the ECB push eurozone small caps higher? – Humble Student

While no action is likely this week, we may get greater clarity on this issue as any central bank stimulus targeted at the real economy would be tremendously bullish for eurozone small cap stocks

  MACRO NUMBERS

Euro area unemployment rate at 12.1% – Eurostat

Volume of retail trade up by 1.4% in euro area – Eurostat

Spain Youth Unemployment Rises To Record 57.7%, Surpasses Greece – ZH

Euro zone unemployment holds at record high, retail sales rebound – Reuters

German Factory Orders Rose More Than Expected in November – BB

Spanish Bonds Gain With Portugal’s as European Retail Sales Jump – BB

UNITED STATES

5 Things to Watch in Housing in 2014 – WSJ

Will Inventory Rise? * Where Is the Home-Construction Recovery? * What Happens to Mortgage Credit? * What Will Investors do With Their Homes? *  When Does Housing Hit a Tipping Point on Affordability?

The US should extend emergency unemployment benefits – alphaville / FT

  FEDERAL RESERVE

Fed’s Rosengren Says Economy Far From Where Needed – WSJ

Rosengren Signals Support for Taper Strategy After Dissent – BB

Fed to ease foot off accelerator, but won't hit brakes: Williams – Reuters

Fed’s Williams: Fed Likely to Taper More, End Bond-Buying This Year – WSJ

  FOMC MINUTES

Minutes of the Dec 17-18 FOMC meeting – FED

Fed Minutes Reveal "Waning Benefits Of QE" – ZH

FOMC Minutes: "Proceed cautiously" with QE3 Tapering – Calculated Risk

Hilsenrath Analysis: Fed Minutes May Show Amicable Taper Decision – WSJ

Key Passages in Fed Minutes: Consensus on QE, Focus on Bubbles – WSJ

USD, Bonds, And Bullion Down Post Fed Minutes – ZH

The Fed had no idea if the taper would terrify markets – WaPo

“Tapering will happen - unless there are exceptional shocks” – TradingFloor

Fed Discusses Tool That May Eventually Help It Set Rates – WSJ

Minutes try to reassure; plus an interesting par about financial vulnerabilities – alphaville / FT

Minutes suggest it will be difficult to strengthen forward guidance further – Danske Bank

FOMC Minutes - The Quick Review – Tim Duy’s Fed Watch

ASIA

China’s Credit Hole Seen Limiting 2014 Growth Prospects – BB

China’s new credit probably fell by a record in the second half amid a crackdown on speculative lending, limiting prospects for economic expansion this year as policy makers focus on controlling financial risks.

OTHER

Guide to the Markets Q1 2014 – JP Morgan

7+1 FX trades of 2014 – Nordea

Scandies to parity. Short NOKSEK * Canada back to Earth. Long USDCAD * Safe haven no more. Long GBPCHF * Terms of trade. Short EURPLN * Too much tightening priced in. Long AUDNZD *

LatAm rebalancing. Long MXNBRL * Least against most fragile. Long INRTRY * Too low. Long FX volatility

361 Capital Weekly Research Briefing – The Reformed Broker

Weekly Bond Update: New issuance picking up – TradingFloor

With fresh money seeking work, the expected new year issuance has begun with a high level of activity and investor interest.

FINNISH

Päivänpaiste sokaisee velkamyrskyn silmässä – Jan Hurri / TalSa

Eurokriisi näyttää tyyntyneen kuin paha myrsky olisi ohi. Kriisin oireet ovatkin rauhoittuneet – mutta syyt ovat ennallaan tai entistä pahempia: talous on heikompi ja velkataakka raskaampi kuin ennen kriisiä. Euroalue onkin ennemmin myrskyn silmässä kuin suojassa.

Yritysjohtajat vauhdittaisivat terveydenhuollon yksityistämistä, kansa haraa vastaan – YLE

Yritysjohtajat yksityistäisivät nykyistä nopeammin sosiaali- ja terveyspalveluja. Lisäksi tappiota tehneet yritykset voisi työpaikkojen menetyksen uhallakin jättää ilman valtion tukia, kertoo Yle Uutisten kysely.

Raportti: Suurilla suomalaisyrityksillä kymmeniä tytäryhtiöitä veroparatiiseissa – YLE

Finnwatch-kansalaisjärjestön raportin mukaan suomalaisyrityksillä on veroparatiiseissa yhteensä 438 tytäryhtiötä. Tytäryhtiöitä on perustettu muun muassa Caymansaarille, Kyprokselle ja Brittiläisille Neitsytsaarille, ja lisäksi alhaisemman verotuksen maihin Belgiaan ja Hollantiin. Suomessa yhtiöiden raportointivelvollisuuksia säätelevät lait eivät velvoita julkaisemaan listausta mahdollisista tytäryhtiöistä.

Kolme kysymystä Suomen tulevaisuudesta: Stefan Törnqvist – Libera

Kuntauudistus repii hallitusta: Maakuntien kansanedustajien kapina kasvaa – SK

”Me näemme jo, että tämä uudistus menee seinään”, kokoomuksen kansanedustaja sanoo.

Uusi vuosi, vanhat ongelmat – Hannu Visti

Millainen EU:n pankkiunionin olisi pitänyt olla? – Henri Myllyniemi / US