W/E: Weekly Support (updated)
EUROPE
Greece and its
international lenders have struck an agreement in principle to unlock the next
tranche of rescue loans after six months of negotiations, three sources close
to talks said on Tuesday.
A eurozone tax on
forex is possible — leaked legal opinion – FT
This opinion from the EU Council legal service will cause a stir, at
least in Brussels. It contradicts the
Commission’s own legal service (they are making a habit of this on the FTT) and
says that there is no law in principle preventing a joint levy on foreign
exchange. This effectively reopens a debate that makes London very nervous.
German court confirms
legality of euro zone bailout scheme – Reuters
Schaeuble: ESM ruling vindicates German government policies – Reuters
German deputy finmin greets court ruling on ESM bailout fund – Reuters
Germany's Constitutional
Court
confirmed on Tuesday the legality of the euro zone's bailout fund, upholding a
preliminary ruling from the height of the debt crisis in 2012 that gave an
initial green light to the ESM.
Jens Weidmann:
External imbalances in the euro area – BIS
Speech by Dr Jens
Weidmann, President of the Deutsche Bundesbank, at the International Business
Cycle Conference, Kiel Institute for the World Economy, Kiel, 17 March 2014.
EUROPEAN CENTRAL BANK
From firmly to weakly
anchored, or the the importance of an adverb! – Money
Matters
Having weakly rather than firmly anchored inflationary expectations
would have justified some action to fortify them on the occasion of the last
ECB Governing Council meeting. Instead, if we take exchange rate movements as
an indicator of inflationary expectations, the strengthening of the € which
followed the press conference in March shows that, instead, the lack of action
from the ECB has further weakened the anchoring of inflation.
Squaring the Circle:
A QE for the ECB – Marc
to Market
Perhaps the ECB can learn something from the Swiss National Bank. Recall that when confronting deflation a few
years ago, the SNB's ability to implement quantitative easing was limited by
the fact that its domestic bond market is too small. Forced by circumstances, the SNB opted for
buying foreign bonds…While not constrained by size of the local bond market,
the way the Swiss National Bank was, the ECB is constrained in a different
way. Buying foreign bonds appears to be
a way to square the circle.
MACRO NUMBERS
UKRAINE / RUSSIA
Putin Backs Russia’s Crimea Annexation, Defying Sanctions – BB
Crimea’s Sudeten Crisis – Project
Syndicate
Putin's Eurasian Fantasy – BB
Putin calms the markets – Danske
Bank
UNITED STATES
Yellen and the Fed, a
WSJ Briefing – WSJ
Free downloadable e-book!
Fed Shouldn’t Use
Rates to Target Bubbles, Paper Says – WSJ
Fed officials have started warming up to the notion that they might one
day need to raise interest rates to prevent dangerous asset bubbles from
inflating too much. A new paper has a simple warning: Don’t do it.
Grand Central:
Handicapping the Fed’s Quarterly Economic Forecasts – WSJ
FOMC Meeting Begins – Tim
Duy’s Fed Watch
The Fed will continue with tapering by cutting another $10 billion from
asset purchases. They will most likely
alter the guidance but continue to signal an extended period of low interest
rates. Low rates might simply be part of
the "new normal" the economy is settling into, a new normal that the
Fed may be unintentionally reinforcing.
What to Watch From
the Fed Wednesday – WSJ
Yellen will likely face questions on the continued reduction in bond
purchases and the recent deterioration in economic conditions.
MACRO NUMBERS
Consumer inflation muted despite food price spike – Reuters
Inflation Misses By Most In 6 Months; Core CPI Drops To 10 Year Low – ZH
Headline Inflation Drops, Core Inflation Essentially Unchanged – dshort
Key Measures Shows Low Inflation in February - Calculated Risk
U.S. housing starts fall,
but permits rebound – Reuters
Housing Starts Drop For Third Month In A Row – ZH
ASIA
Monitor: Chinese
Credit Crunch – Danske
Bank
OTHER
EM Bond Snapshot -
March 2014 – Danske
Bank
Taper Talk Slammed
Strong Emerging Nations Most – WSJ
New research argues emerging-market nations hit hardest in the run up to
the Federal Reserve’s decision to cut back its bond buying were those whose
financial houses were in the best order, relatively speaking—a finding contrary
to much recent conventional wisdom.
FX Trends: Central
bankers push 'snooze' button – Danske
Bank
FINNISH
Danske Bank ennustaa puolen prosentin kasvua – Verkkouutiset
Venäjän valuuttavaranto ei tehokas ase – Roger
Wessman
EK:n Häkämieheltä tiukka "ei"
verojen korotuksille, lisäsopeutus kokonaan säästöillä – Verkkouutiset
On surullista, että leipänsä voi ansaita
näinkin – Professorin
Ajatuksia
Dosentti
Johan Bäckman on erikoistunut antamaan poliittisesti värittyneitä ja Venäjää
myötäileviä lausuntoja Suomessa ja muualla.
Pulppuileva talous, onnelliset ihmiset – Akateeminen talousblogi