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Monday, March 31

31st Mar - Disinflation in EZ

Yellen spoke (dovish), euro area's inflation in March fell to alarmingly low 0.5 percent (ECB meeting next Thursday) and a new book from Michael Lewis.

Previously on MoreLiver’s:

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France’s National Front: On the marchThe Economist
Marine Le Pen’s success should serve as a warning to the political elite in France and across Europe.

Has the EUR hit its biggest sell since inception?TradingFloor
Lars Seier Christensen  (co-founder & CEO, Saxo Bank) has been surprised by the EUR's resilience over the past few months, but that doesn't change his belief that reality and gravity will finally return to the world’s largest market.

BOE’s Bailey: Stress Tests Will Look at Housing RisksWSJ
An upcoming health check of British banks will test whether lenders can withstand a collapse of the housing market, a senior Bank of England official said Monday, amid concern the U.K. may be at risk of experiencing a new real-estate bubble.

ECB and US Jobs Dominate the Markets Next WeekMarc to Market
ECB: The tone of official comments has turned more dovish and the BBK appears to have eased its opposition to QE. However, the ECB still refuses to recognize risks of deflation and sees "light at the end of the tunnel"… Surveys suggest an overwhelming majority do not expect the ECB to cut rates. Jobs: The shift in the Fed's forward guidance may encourage a change in the market's focus. We suggest that average hourly earnings may be of greater importance than the market often attributes to it.

ECB room for manoeuvre capped despite growing disinflation threat TradingFloor
Juhani Huopainen: Realised inflation continues falling, but the ECB may find the options available in its toolbox to effect any change is limited. As ever, it should be able to draw on a large reservoir of excuses, but its credibility is in danger of running out.

Why is the ECB hesitating on monetary easing?Sober Look
Ultimately the ECB could be right and some day, as the banking system is "restructured", the Eurozone's economy will heal itself. But that was also the attitude in Japan years ago when the nation undertook its banking reform. Yet deflation in Japan persisted for years since then, becoming heavily entrenched in the economy. Is the ECB now willing to take that chance?

Spain, the ECB and the power of talkForbes
Frances Coppola: I do not expect the ECB to do any significant easing at the moment. But that doesn’t mean they won’t continue to talk about it. After all, signalling has worked well so far.

Euro zone banks slow crisis loan returns as extra cash fallsReuters
The pace at which euro zone banks are repaying their crisis loans to the European Central Bank has slowed significantly as extra cash in the system reaches critically low levels.

Why Draghi might wait, despite shock eurozone inflation newsTradingFloor

German fin min expects ECB rates to rise: Der SpiegelReuters
ECB's Weidmann says euro zone not in deflationary cycleReuters

Russian propaganda: 1984 in 2014The Economist

The Baltic states: Echoes of the SudetenlandThe Economist

The future of NATO: First principlesThe Economist
Russia’s annexation of Crimea has brought NATO a renewed purpose.

President Putin’s economic Achilles heelFT
As a result of the crisis, the economy now stands on the brink of outright recession, the first in any of the BRIC economies since 2009…Whether the global financial markets could turn a blind eye to this crisis if Russian troops enter the eastern Ukraine seems doubtful. But, in any likely eventuality, President Putin must know that the Russia would be the main economic loser.

Russia’s Sovereign Bond Rating May Be Cut, Moody’s SaysBB

Euro area annual inflation down to 0.5% - Eurostat
ECB credibility – FT
Euro inflation declined to a new cycle low of 0.5% - Danske Bank
Great Graphic: Breakdown of EMU February and March CPI – Marc to Market
Euro zone inflation drops to lowest since 2009 – Reuters
Euro Inflation at Lowest in Over 4 Years Misses Estimates – BB
Imported Deflation and a New Currency War? – Marc to Market
Inflation drop pins peripheral bond yields at multi-year lows – Reuters
IMF calls for ECB efforts to tackle 'low-flation' – Reuters
European Inflation Slides To Lowest Since 2009 – ZH

5 Reasons Why Janet Yellen Still Sees Slack in Economy – WSJ
Yellen: four pieces of evidence of slack in the US labour marketFT
Janet Yellen Gives ‘One of the Most Dovish Speeches I Have Ever Read’ – WSJ
Stocks Surge As Yellen Goes Uber-Dovish – ZH
Yellen backs dovish stance – Reuters

How Our Big Banks Really Make Their MoneyBB
The eight biggest U.S. banks earned more than $80 billion last year, with much of that coming from government subsidies, according to a new report from the IMF..

What's wrong with the Fed?The Economist
Since the Fed [declared its goal}, PCE inflation has been below target roughly 90% of the time. It was just 0.9% in the most recent data release, and markets believe inflation will remain below target for the foreseeable future.

Chicago PMI Plunges To 7-Month Lows, Misses By Most In A Year – ZH
Chicago PMI declines to 55.9 – Calculated Risk

Japan PMI Tumbles & Industrial Production Misses By Most Since Abenomics ZH
Japan factory output contracts, dims growth outlook as tax hike loomsReuters
Output unexpectedly fell in February at the fastest pace in eight months, leaving the economy in a precarious position as an impending sales tax hike threatens to choke consumption and undermine the government's revival plan.

Is Abenomics Working? FT
A recent paper argues that Abenomics has been successful in generating monetary regime change, and that this has lead to an increase in output — but much more work is left to be done.

Bad loan writedowns soar at China banksFT
The five biggest Chinese banks, which account for more than half of all loans in the country, removed Rmb59bn ($9.5bn) from their books in debts that could not be collected, according to their 2013 results. That was up 127 per cent from 2012, and the highest since the banks were rescued from insolvency, recapitalised and publicly listed over the past decade.

Global banks issue alerts on China carry trade as Fed tightens and yuan fallsThe Telegraph
Citigroup tells clients to brace for second phase of the "taper tantrum" that rocked emerging markets last year, but this time with China at the eye of the storm

Slump in China property sales adds to default concernsFT
Sales volumes during the first 23 days of March were down 34 per cent from the same period a year earlier.

Why China Will Not Dominate the 21st CenturyCFA Institute
Will China Dominate the 21st Century?, published this month, tackles the question head-on. Despite the title, it’s not an open question; rather, it is a treatise on why China will not dominate the 21st Century.

China Defaults Sow Property Cash Crunch Concern: Distressed DebtBB
China’s Stocks Benchmark Posts Biggest Quarterly Loss Since JuneBB
Copper Set for Biggest Quarterly Drop Since June on ChinaBB

Australia loses its lucky status to become a pre-Thatcher BritainTradingFloor
While Steen Jakobsen loves Australia, he says the country is in economic denial despite the government of Prime Minister Tony Abbott attempting to reign in some of the excesses.

Introducing Saxo equity pair tradesTradingFloor
We introduce a new publication on that will provide weekly pair trade candidates from a select list of well-known equities from the S&P 500, Nasdaq 100 and Euro STOXX 600 indices.

Saxo equity pair trades: Insurance play tops listTradingFloor
Weekly top 10 of potential pair trades from top equity indices * Insurance pair Swiss Life Holding, Aviva head list * Mean-reversion potential in two Hollywood giants

FX Board for March 31, 2014: JPY swan dives into new yearTradingFloor
John Hardy: The last day of the Japanese financial year is seeing a swan dive of JPY weakness. EURUSD remains cagey ahead of the heavy US data calendar this week and the ECB meeting on Thursday.

A global election pile-up in MayFT

NYSE Margin Debt Hits Another Record Highdshort

Michael Lewis Views Market as ‘Rigged’ in Favor of High-Speed Traders – NYT
Full circle idealism, the HFT story – FT
60 Minutes: Is the U.S. stock market rigged? – The Big Picture
“The Stock Market is Rigged!” – The Reformed Broker
"The Market Is Rigged" - Michael Lewis Explains How HFTs "Screw" Investors – ZH
High-Speed Traders Rip Investors Off, Michael Lewis Says – BB
Michael Lewis: The Stock Market Is Rigged – WSJ
Stock markets are rigged: Michael Lewis – Reuters
Speed Trading in a Rigged Market – View / BB
Michael Lewis Doesn't Like High-Frequency Traders – View / BB


Mikä painaa Suomen tavaravientiä?Roger Wessman

Deflaatiouhka ei kasvanut euroalueellaRoger Wessman

Euroalueella ei tarvitse pelätä inflaatiota eli hinnat eivät ainakaan nouse – tosin deflaatio nostaa rumaa päätäänTyhmyri

Näin EKP nitisti yritysrahoituksenTalouden Tulkki

Suomi sosialisoidaan – Jo riittääPauli Vahtera / IL

Halpaa puhettaHenri Myllyniemi / US
Eurostat kertoi, että juna kohti deflatorista lamaa ohitti juuri yhden pysäkin pysähtymättä.