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Monday, April 28

28th Apr - Quiet before the event storm

Previously on MoreLiver’s:

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IMF preferred creditor status and the Eurozone
By lending €30 billion to Greece in 2010, the IMF introduced the option to permanently waive the requirement that a borrowing country is on the path to stability. This option increases the chance of moral hazard and undermines the strong framework for the preferred creditor status.

EU Nations Seeking Transaction Levy Remain Stuck on What to TaxBB
The 11 participating countries remain divided on whether to tax all derivatives, only equity derivatives or no derivatives at all, EU documents show… Proponents of the FTT, led by France and Germany, are trying to reach an agreement before the election in a bid to woo voters. The governments are now debating a phased approach that could target a wider range of trades in future years.

Europe Lacks Founding Father as Russia Sows DivisionsBB
Believers in a more centrally managed Europe contend that unstable surroundings will jell the EU together, just as the looming presence of the British navy helped unite the United States.

Portugal to Choose Irish Exit Route as Yields SinkBB
Banks are telling clients that Portugal is strong enough to exit its bailout program next month without the need for a financial backstop.

Spain: Where Incipient Deflation Becomes Good News For Headline GDPEconomonitor
No Edward, that's not how it worksIbex Salad

Riksbank Won’t Tolerate More Price Shocks, af Jochnick SaysBB

Deflation, emerging market fears set scene for tough EU bank testsReuters
Fears of euro zone deflation, emerging markets turmoil and a determination not to repeat past mistakes mean European regulators are likely to come up with the toughest set of tests for the region's banks that they have ever faced.

EU Stress Test Features Bond Rout, Eastern Europe ShockBB
The negative impact of the shocks, which include also stress in the commercial real estate sector, as well as a foreign exchange shock in central and eastern Europe, is substantially global. For most advanced economies, including Japan and the U.S., the scenario results in a negative response of GDP ranging between 5-6 percent in cumulative terms compared to the baseline.

ECB needs to look at QE but also at its effectiveness: HanssonReuters
Printing money to buy assets is something the ECB should keep looking at, but the effectiveness of all policy tools must be considered, along with when they might be used, ECB policymaker Ardo Hansson said.

ECB chief sees low inflation persisting but QE still distant: sourceReuters
Draghi told lawmakers from Germany's ruling coalition on Monday that low inflation would persist in the euro zone but quantitative easing remains a way off, according to a source who took part in the meeting.

Financial Integration in EuropeECB
Press releaseECB
Integration in European financial markets improved, but still worse than before crisis, new European Commission, ECB reports show

Constâncio: Reflections on financial integration and stabilityECB
Euro Zone Making Progress, Says ECB’s ConstancioWSJ
ECB’s Noyer Sees Strong Euro Weighing on PricesWSJ

Euro inflation outlook and implications for the ECBDanske Bank
The message from the ECB is that a worsening of its outlook for price stability would warrant a monetary policy response, but it needs more information to assess whether this is the case…the lower inflation in 2014 will not necessarily lead to a change in the medium-term outlook for inflation and we think it is 50-50 whether the ECB will ease in June. The better growth outlook and a potentially higher growth forecast in 2014 makes more easing less likely

Germany’s Inflation ConundrumWSJ
Germany’s low inflation rate even in light of the strength of its currency is a puzzle.

Draghi Awaits Pivotal Price Data That Could Spur ActionBB
The most-radical policy decision of Mario Draghi’s 2 1/2 years so far at the helm of the European Central Bank could hinge on a single piece of data.

U.S. Plans to Hit Putin Inner Circle With New SanctionsBB
The U.S. and European Union will impose new sanctions as early as Monday on Russian companies and individuals close to President Vladimir Putin over the escalating crisis in Ukraine

Europe’s Act in Ukraine’s TragedyProject Syndicate
Joschka Fischer: Sanctions will not impress Vladimir Putin enough to persuade him to change course on Ukraine, because he and his cronies are isolating Russia economically and financially more effectively than most sanctions could. Peaceful yet tangible political steps within the EU, including the creation of a European energy union, just might.

US Unveils New Sanctions Against 7 Russians, 17 Companies – ZH
U.S. sanctions more Russians over UkraineReuters
CEO Of Russia's Largest Oil Company, Rosneft, On US Sanctions List – ZH
Russia Voices "Disgust" At New US Sanctions, Warns "Won't Go Unanswered" – ZH
U.S. Strikes at Putin’s Inner Circle With Sanctions as Fight Over Ukraine Intensifies – BB
Russian Billions Scattered Abroad Show Trail to Putin CircleBB
Europe's Armies Don't Scare Putin – BB

FOMC WeekTim Duy’s Fed Watch
I anticipate a relatively unevently FOMC meeting. The data flow appears sufficiently consistent with the Fed's forecast to hold policy in check.

What you need to know about the Fed’s meeting this weekWaPo

Japan’s 20-Year Deflationary Spiral Is About To EndAsia Confidential
Myth of a Japanese economic recovery * More stimulus soon * Wage growth around the corner * Positives from inflation…Offset by bond market risks

Japan retail sales rise at fastest pace in 17 years before tax hikeReuters

Australia’s PM Makes Pitch For Budget CutsWSJ

China must move cautiously in cutting leverage ratio: PBOC officialReuters
China must act cautiously in cutting leverage ratios in the corporate and government sectors, as any abrupt move could deal a blow to an economy that is already slowing, a senior central bank official said in remarks published on Monday.

Ranking Economic DataCalculated Risk

Global Macro Part 3: Stocks & BondsShort Side of Long
Cyclical equity sectors are starting to under-perform defensives * Stock vs Bond ratio is giving us a bearish non-confirmation! * Treasuries have done poorly over the last year & could rebound! *

Should you sell in May?Humble Student
The technical warning signs of equity weakness are clear to see. For the past several weeks, I have been voicing technical concerns about the stock market. This year seems to be a market where the adage of ”Sell in May and go away” is applicable. What puzzles me is the lack of a fundamental trigger for the decline.

Central Banks: Fed on Track to Hold Policy Steady, Mull Economic PuzzlesWSJ

Macro: Investors Have Day of Rest Before Busy WeekWSJ

GDP Nominally DisappointsWSJ
How are economies doing on the nominal front? Not only are they doing considerably worse than they did in the years before the crisis–with the exception of Germany and Japan–but all the major developed countries are falling significantly short of 5% nominal growth rates.

New Financial ForecastsNordea
We have lifted the near-term US rates forecasts, while keeping the EUR rates forecasts unchanged, and we have made minor adjustments to our forecasts for EURNOK, USDJPY, EURCHF and USDCNY. We also take the opportunity to summarise the recent changes to our Riksbank and EURSEK forecasts, while we have kept all Danish forecasts unchanged despite the surprise (deposit) rate hike from Nationalbanken last week.

Viikkokatsaus: Vauhti paraneeNordea
Tällä viikolla: Euroalueen inflaatio nopeutuu * Fed pienentää ostojaan * Työllisyysluvut Yhdysvalloista * Q1:n BKT-kierros alkaa (USA, UK). Viime viikolla: Luottamus vahvistui euroalueella

Rationaaliset valtionlainamarkkinat?Roger Wessman

OMT ja korkoerojen laskuRoger Wessman

Kulutus pysyy alamaissaRoger Wessman

Buranalla hoidettu aivokasvainAntero Vartia  / US

Euroskeptinen puolue ykkönen BritanniassaVerkkouutiset

EK: Teollisuusyritysten luottamus EU-maiden toiseksi heikointaVerkkouutiset

Synkkä ennuste: Pitkäaikaistyöttömyys jatkaa kasvuaanVerkkouutiset
Työllisyys ei lähde heti nousuun, vaikka talous kääntyisi kasvuun, todetaan työ- ja elinkeinoministeriön tuoreessa työmarkkinaennusteessa.

Osakeasuntojen hinnat nousivat hieman maaliskuussaTilastokeskus

Kuluttajien luottamus heikkeni huhtikuussaTilastokeskus