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Wednesday, February 5

5th Feb - After positive Jan PMI, ECB ahead





Previously on MoreLiver’s:

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EUROPE
The German economy is not as strong as it looks – Europp / LSE
Levels of internal investment are relatively low in comparison to other European countries, and that demographic trends are likely to impede future development. Rather than relying on Germany to pull Europe out of its crisis, helping ‘periphery’ countries to stand on their own feet may be a more productive solution.

Booze, Brussels and the next Commission president – The World / FT
The EU has just been through a wrenching crisis that has raised questions about its very survival. And it is also now a club of 28 countries. But the three main candidates for Commission president are all traditional European federalists – drawn from the seven founding member states.

  CRISIS COUNTRIES
Soaring Corruption in Spain: Perception or Reality? – WSJ


Chart Of The Day: Spanish "Recovery" Edition – ZH
 
Hryvnia? We hardly knew ye – alphaville / FT


BNP Warns "The Run On Ukrainian Deposits May Have Already Started" – ZH
‘Meaningful FX Run’ Hammers Ukraine’s Currency – WSJ


EU Said to Weigh Extending Greek Loans to 50 Years – BB

  EUROPEAN CENTRAL BANK
ECB Preview: End of sterilisation? – TradingFloor
While the ECB will not necessarily act this week, a consensus has formed that something will be coming. Sterilisation, the sacred cow of hard money policy, could be near the end of the road.

ECB's next steps could involve suspending SMP sterilization - instant QE – Sober Look

An ECB Nail-Biter: Will It Cut Rates? – WSJ
 
ECB Preview – Marc to Market
The ECB meets on Thursday amid heightened speculation it will make a new initia
tive given the deterioration of the two pillars of its monetary policy, money supply and inflation.  

Deflation, now vs then – alphaville / FT
As we await for the ECB to act or not later in the week, Capital Economics’ Jonathan Loynes took the time to note there are good reasons to think a new bout of deflation could be both longer- lasting and more pernicious than the last one

If Not Quantitative Easing, What Can the ECB Do? – PIIE
Admittedly, purchases of private bank assets by national central banks would not help the rebalancing of the euro area. They also would not require Germany and other core countries to boost domestic demand and accept higher inflation. But Germany is more likely to accept this course of action now than to pursue greater inflation throughout the euro area, even at the risk of future risk mutualization.

The ECB should be more aggressive on monetary policy – Bruegel
Promise to do “whatever it takes” stabilized the euro but hesitant stance to fight low inflation or even deflation will undermine stability



What to Expect From the ECB Meeting – WSJ
 

UNITED STATES


Employment Preview for January: Taking the Over – Calculated Risk
 
  FISCAL
Treasury Bill Yields Are Surging As Debt-Ceiling X-Date Approaches – ZH

CBO Projection: Budget Deficit to be below 3% of GDP for next four years – Calculated Risk

  FEDERAL RESERVE
Fed’s Evans: Rate Increase Still Unlikely Until 2015 – WSJ

No End To Tapering Yet – Tim Duy’s Fed Watch
 The Fed isn't ready to change course.  Recent turbulence is enough to peak their curiosity, not enough to suggest that tapering was premature.  

Daniel K Tarullo: Volcker Rule – BIS
Testimony by Mr Daniel K Tarullo, Member of the Board of Governors of the Federal Reserve System, before the Committee on Financial Services, U.S. House of Representatives, Washington DC, 5 February 2014.

EMERGING
The $3 Trillion Hole - Why EM Matters To European Banks – ZH



Everything You Need to Know About the Emerging-Market Currency Collapse – The Atlantic
Money poured into developing economies after the financial crisis, and now it's starting to pour out. How much should we worry?
 
Charting the worst hit in the emerging market retreat – beyondbrics / FT

Above the noise: Why do we care about emerging markets? – TradingFloor
Emerging markets only account for about 10.6 percent of the total investable equity universe so why do we care about these countries? We provide the answer, and highlight our favourite emerging market countries.



The Next Steps For The EM Crisis (In 4 Charts) – ZH

5 Takeaways From EMPEA’s Annual Report – WSJ
Private equity investors’ response to whipsawing global public markets is more often than not “keep calm and carry on.” That seems to be the case in emerging markets, according to the latest annual data published by the Emerging Markets Private Equity Association.


OTHER
Investment Outlook: ding dong — is this a bear song? – TradingFloor
January saw a tough but familiar start to the new investment year: equities fell as did bond yields and EM FX looked like something to which even alley cats would give a wide berth. This is most likely just another correction in a longer-term upturn.

Martin Wolf Sounds Cautionary Note on Rise of Robots – Naked Capitalism



2 Senior Foreign Exchange Executives to Step Down – NYT
How the FX Fallout Has Spread – WSJ

How The Rest Of The World Sells Its Government Bonds – ZH


FINNISH
Sasi: Kreikan uusi tukipaketti olisi ongelmallinen – "velat maksettava takaisin" – Verkkouutiset
Lähteet: Kreikan lainojen takaisinmaksua aiotaan lykätä – TalSa

Hallitus kärsii muiden mokista – Risto Pennanen / TalSa
Edelliset hallitukset ovat vaikeaan taloustilanteeseen enemmän syyllisiä kuin nykyinen.

Keskuskauppakamari: Julkinen talous kuntoon kolmen askeleen ohjelmalla – Verkkouutiset

"Kiinan pankkitulivuori savuttaa jo" – TalSa
Kiinan pankkien luottokanta on paisunut kuin pullataikina. Nordean pääekonomisti ja tutkimusjohtaja Aki Kangasharju uskoo, että korjausliike on tulossa.

Kansantalouden tuotanto pieneni marraskuussa 2013 – Tilastokeskus