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Friday, May 30

30th May - Mixed Macro, Waiting for ECB

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A Quarter Of Europeans Are At Risk Of PovertyZH

Drop in Italian, Spanish inflation feeds euro zone deflation worriesReuters
Annual consumer inflation slowed in Italy and Spain in May, heightening concerns about deflation risk in the euro zone as the bloc's central bank gears up for an expected growth-boosting shift in monetary policy next week.

Europe’s Litmus TestProject Syndicate
The European Parliament election is grabbing headlines worldwide, as it highlights a new skepticism in the European politics and raises concerns about the future of the integration project. But the real litmus test for the EU is to be found elsewhere – in the health of its smaller economies, especially Greece and Ireland.

Europe’s crisis of legitimacy is not confined to the EUFT

While Geert Wilders suffered a disappointing result, the Dutch EP elections were still a long way from a ‘vote for EuropeEuropp / LSE

Re-Winning EuropeProject Syndicate
Javier Solana: Last weekend’s European Parliament election revealed the full extent of voters’ frustrations, discontent, and lack of confidence in both the EU and their national governments. If the EU is to retain public loyalty, it needs a program of strategic priorities.

Mr. Draghi–Your Public AwaitsWSJ
According to a client survey carried out by foreign-exchange analysts at Nomura this week, 95% expect a cut to the refinancing rate—currently at a record low of 0.25%–while 90% think the ECB will press ahead with a negative deposit rate. More than half are expecting some form of liquidity injection, although just 10% anticipate a QE announcement next week. In short, hopes are running high.

ECB signals fire up Eastern European bond rallyFT

ECB and BoE plan to revive EU securitization, boost investmentReuters
The ECB and the BoE set out proposals on Friday to resurrect the European Union's market for asset-backed securities and help the flow of credit to smaller businesses. -

ECB ready to act to avoid risks from low inflation: Constancio - Reuters
ECB vice president Vitor Constancio said on Friday the ECB was not complacent about the risks from a protracted period of low inflation and would act if necessary.

ECB's Visco warns on inflation drop, euro strengthReuters
Excessively low inflation in the euro zone should be dealt with as firmly as high inflation, ECB Governing Council member Ignazio Visco said on Friday, adding that a strong euro had helped push inflation too low.

Fed’s Pianalto: Fed Has Succeeded at Checking Inflation – WSJ
Fed’s Plosser: U.S. Inflation is on its Way Back Toward 2% Target – WSJ
Fed's Plosser: Sub-six percent U.S. unemployment rate possible by year end – Reuters

Fed's Evans: don't use rate policy to fight instability – Reuters
Lacker urges limits on Fed's credit market 'activism' – Reuters
Fed's Williams: Fed funds at two percent or higher by late 2016 – Reuters
Fed's Mester stresses stable prices, inflation research – Reuters

Visualizing GDP: Dissecting the Q1 Second Estimate – dshort
Real GDP Per Capita Plunges to -1.60% - dshort

Personal income and outlays April 2014 – BEA
Income +0.3% in April, Spending -0.1% - Calculated Risk
PCE Price Index: Headline and Core Remain Below Target, But Rising – dshort
U.S. consumer spending dips; inflation creeps up – Reuters
Consumer Spending in U.S. Unexpectedly Declines – BB
The Latest on Real Disposable Income Per Capita – dshort

Chicago PMI Rises Above Highest Estimate, Employment Drops; Prices Paid Soar – ZH

Final May Consumer Sentiment at 81.9, Chicago PMI increases to 65.5 – Calculated Risk
UMich Confidence Misses; Current Conditions Lowest In 6 Months – ZH
Michigan Consumer Sentiment: A Disappointing 81.8 May Final – dshort
U.S. consumer sentiment down in May, wages a concern – Reuters
Consumer Sentiment in U.S. Fell More Than Forecast in May – BB

Abenomics Suffers Crippling Blow: Economy Sputters As Inflation Soars, BOJ QE Delayed IndefinitelyZH

ECB, BOJ Fighting a Zero Sum BattleWSJ
Maybe now that the Bank of Japan’s chiefs have decided it will hold off pressing the policy levers during the rest of this year, it could be the ECB’s turn to play win the zero sum game for a change.

Macro DailyWSJ
The simultaneous return of inflation in Japan and the rise of disinflationary trends in Europe tell us that the most effective solution that “Abenomics” found to Japan’s deflation problem was to export it to other countries via a weaker yen… monetary policy as it has been conducted has zero-sum effects. It needs to be coordinated across borders.

Central Bank DailyWSJ
KC Fed’s George Sets Battle Lines on Rate Hikes * Fed’s George: Fed Should Begin Rate Hikes ‘Shortly’ After Bond Buys End * ECB, Bank of England Outline Options to Boost Asset-Backed Securities Market * Japan Inflation Accelerates * India vs. China: Democracy Eases Downturns?