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Thursday, March 13

13th Mar - Draghi surprises, Ukraine worse

Previously on MoreLiver’s:

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It is time to stand up for the European UnionThe A-List / FT
George Soros: Europe is at a crossroads. It faces two crucial decisions: one is the future of the eurozone; the other is Britain’s role in Europe. The eurozone needs to become more integrated. It needs a common fiscal budget policy, a banking union and a more level economic playing field.

German Stocks Collapse To 3-Month Lows As Russia Nears Bear MarketZH

German Exporters Fire Warning Shot About Russia “Sanction-Spiral,” Banks At RiskTestosterone Pit

ECB to ease in April as inflation will continue downwardsDanske Bank
Final euro inflation is likely to be revised down to 0.7% from a flash estimate of 0.8%...Core inflation is expected to decline to 0.5% y/y in March 2013…We expect a 0.5% print of euro inflation to lead to immediate easing from the ECB

Why the ECB Should Buy AmericanProject Syndicate
Jeffrey Frankel: ECB needs to ease monetary policy further. And, with purchases of member governments' bonds a risky – and possibly illegal – proposition, loading up on US Treasuries would be the best way to go about it.

Economic flaws in the German court decisionvoxeuorg
Paul De Grauwe: The German constitutional court declared the OMT program to against EU law. This column argues that the economic logic used by the German judges was flawed – based on economic theories that have been rejected empirically.

Bank restructuring and the economic recoveryECB
Speech by Mario Draghi, President of the ECB, at the presentation ceremony of the Schumpeter Award, Oesterreichische Nationalbank, Vienna, 13 March 2014

Draghi Praises European Banks That Are Cleaning Up Their BooksNYT

Meanwhile, The Euro...ZH
It would appear that 1.39 EURUSD is the line in the sand for Mario Draghi. As pressures build on European competitiveness, Draghi appears to have finally got sick of China buying EURs to diversify its FX reserves away from USDs.

Monthly Bulletin, March 2014ECB
Statistics Pocket Book, March 2014ECB
ECB Staff macroeconomic projections for the euro areaECB

Russia Massing Military Forces Near Border With Ukraine NYT

Why Ukraine Matters More Than You ThinkZH
Citi’s Matt King: As we see it, each additional headline, and each downward revision to EM growth prospects, takes us closer to the point where investors undertake a wholesale reevaluation of the risk-reward of EM assets for their portfolios – just as has already happened with gold, and is happening with commodities more broadly.

Coming Together and Falling ApartProject Syndicate
Michael J. Boskin: An EU Association Agreement could be a huge boon to the Ukrainian economy. But free-trade agreements presuppose the existence of established political borders, and Ukraine is not the only country that might come apart.

Ukraine Casts Shadow Over Western European MarketsWSJ

Factbox: Western sanctions against RussiaReuters
Russia Preparing for Iran-Style Sanctions Over UkraineBB

Russia holds war games near Ukraine; Merkel warns of catastropheReuters

Italy’s love affair with Brussels coolsFT
The Five Star Movement and Forza Italia may well decide to take a more decisively anti-euro stance. Of course, this would be risky, which could scare off more potential supporters than it attracts. But as the mood vis-à-vis the union darkens, it is a gamble which may well pay off.

Periphery business cycle monitorDanske Bank
Euro area periphery data continues its improvement and most sovereign yields are now touching historical lows (10Y).

The market does not expect overshootingThe Economist
Futures markets anticipate the first rate hike in the fall of 2015. Rate are then set to rise about one percentage point per year. This locks in a solid amount of “overshoot” already.

Retail Sales increased 0.3% in February – Calculated Risk
February Retail Sales Up 0.3% But from Significant Downward Revisions – dshort
U.S. retail sales rebound from winter chill, jobless claims fall – Reuters

Ranking EM vulnerability to ChinaFT
In summary, the emerging markets most vulnerable to a slowdown in Chinese fixed asset investment are several Latin American economies, Russia and South Africa. In contrast, Hungary, the Philippines, Poland and Mexico seem fairly well positioned.

China: GDP growth to fallDanske Bank
Weak data suggests GDP growth could drop below government’s 7.5% growth target as soon as Q1

Economists React: China’s Slowdown Confirmed, but no Hard LandingWSJ

Country Trading Range ScreenBespoke
Depending on what drives your macro view of the weakness (continued Fed tapering, geopolitical instability in Eastern Europe, a slowdown in China, to name a few), there are either great bargains available or serious risks for international investors.

Commodities Update: The copper corrosion continuesDanske Bank

EMEA Weekly: Week 12Danske Bank
Rouble rates jump on fears of possible capital controls * Political tensions in Turkey
back in the spotlight

Traders Beat Market Indexes Borrowing Tools From SportsBB

Popular Memes That Are Partially or Completely BSThe Fat Pitch

Professori Ylelle: Suomen ongelma on huono hallintoVerkkouutiset
Julkisjohtamisen professorin mukaan Suomen korruptioon liittyvät ongelmat ovat huono hallinto, maan tapa ja hyvä veli -verkostot, kertoo Yle Uutiset.

"Suomen haettava Nato-jäsenyyttä, jos Ruotsi hakee"Verkkouutiset

"Ruotsissa julkisen talouden alijäämä on yhtä suuri kuin Suomessa - meillä on kriisi, siellä taas ei"TE
Ilmarista johtavan Jaakko Kianderin mielestä erot siinä, miten Yhdysvallat ja Eurooppa ovat viime vuosina toteuttaneet talouspolitiikkaansa, näkyvät selvästi myös siinä, miten ne ovat talouskriiseistään toipuneet.

PuutaheinääHannu Visti

Teollisuuden liikevaihto supistui Q42013 3,5% YoY – Tilastokeskus
Rakennusyritysten liikevaihto väheni Q42013 1,5% YoY – Tilastokeskus
Palvelualojen liikevaihto kasvoi Q42013 0,3% YoY – Tilastokeskus