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Tuesday, May 6

6th Apr - Ok data removes ECB-hopes, markets tumble

Previously on MoreLiver’s:

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France to break eurozone spending cuts promise, shows EU forecastThe Telegraph
President Hollande's failure to cut spending puts France on collision course with the eurozone

“The urge to merge meets the dash for trash”FT
Matt King believes that the combination of the remarkably supportive liquidity environment of the past few years and the lack of better alternatives will remain in place for a while — even as credit fundamentals keep deteriorating and valuations become less and less attractive. This “greater fools game” is unlikely to end well…King’s new note is about the incentive for investors in European credit to shift down in quality.

Britain and the limits of austerityReuters
Lawrence Summers: While Britain's economic growth has been rapid recently, this is only because of the depth of the hole that London dug for itself.

OECD Joins Chorus of Concern on UK House PricesWSJ

Great Graphic: Bank Exposures to RussiaMarc to Market
While the US, German, UK, and Swedish banks cut back on exposure to Russia in Q4 2013, French banks did not very much. France's $50 bln is by far the greatest exposure. Moreover, they note that a good part of France's exposure is illiquid as it is in the form of Soc Gen's ownership stake of Russia's 9th largest bank Rosbank, worth about $22 bln.

The ECB must - and can – actBruegel
By coyly debating the definition and likelihood of deflation, while hoping for a renewal of inflation, the ECB is ignoring increasing risks, especially the growing cracks in the Italian fault line… The ECB may already have waited too late. Even if it were to finally act, its past delays may render its actions and  

Addressing weak inflation: The ECB’s Shopping ListBruegel
Think Tank Sees Workaround for ECB Bond BuysWSJ
Inflation forecasts by the ECB have fallen substantially below the two percent threshold. It was a mistake that the ECB did not act earlier. Conventional policy measures are unlikely to change inflation dynamics substantially. The ECB therefore needs to start buying assets. We propose to buy €35bn per months of a portfolio of ESM/EFSF/EU/EIB bonds, corporate bonds, and ASB. Buying international securities is not advisable as it would be against international commitments (full 25-page pdf-document).

ECB seen on hold as inflation picks up, QE a way offReuters
ECB will likely hold off policy action on Thursday, waiting for new forecasts from its staff in June before deciding whether to counter low inflation that ticked up last month.

Draghi Grapples With Money Markets Showing Revival Too SoonBB
Draghi may need to take action to stop money-market investors getting ahead of themselves.

Goldman Sachs’s Take on this Week’s ECB MeetingWSJ

A Glance at the ECB’s DashboardWSJ

Why European QE Will Not Help (In 2 Simple Charts)ZH

Euro zone businesses off to bumper start in second quarter: PMI – Reuters
PMIs Point To Pick-Up in Euro Zone Domestic Demand – WSJ
Spanish Services at Seven-Year High as Euro-Area Index Increases – BB

Volume of retail trade up by 0.3% in both EZ and EU – Eurostat
Euro retail sales data indicates strong private consumption – Danske Bank
Euro zone retail sales surprise with a month-on-month rise in March – Reuters
Euro-Zone Retail Sales Rise as Economy Grows – WSJ
Part of the surprise: Feb revised to 0.1% from 0.4% – TradingFloor

Improved consumer sentiment could result in pent-up demand in durable goods being unleashed after being withheld during the crisis…Retail sales in the euro zone defied expectations of a fall and rose on the month in March driven by sales of food, drinks and tobacco, but spending patterns differed widely across the bloc…Part of the surprise: Feb revised to 0.1% from 0.4%

US: How tight is the US labour market?Danske Bank
The data is not conclusive but, given the Fed view, we believe the risk seems skewed towards a tighter job market than perceived by the Fed.

The Fed’s riposte on short v long-term unemploymentFT

Deutsche Bank’s 11 Reasons Why Everyone Is Buying TreasurysZH

U.S. economy to see faster growth after winter freeze: OECDReuters
U.S. economic growth is set to rebound strongly in the second quarter as the scars of a brutally cold winter fade, but inflation pressures will remain tame through 2015, according to the OECD

Trade Deficit decreased in March to $40.4 Billion – Calculated Risk
March Trade Deficit Worse Than Expected – ZH
US trade deficit narrows to USD 40.4bn in March – TradingFloor
Vital Signs: Capital Goods Trade Is Firmly in Deficit – WSJ
CoreLogic: House Prices up 11.1% Year-over-year in March – Calculated Risk
Q1 GDP Cut To -0.6% At Goldman, -0.8% At JPMorgan – ZH

China’s leaning towersFT
Nomura says every property market leading indicator at the national level turned down in Q1, and for most monthly indicators the rate of decline accelerated through the quarter. The question is no longer “if” or “when”, but rather “how much” China’s structurally oversupplied property market will correct.

OECD cuts China 2014 growth forecast to 7.4 percentReuters
China's economic growth is likely to slow to 7.4 percent in 2014 from 7.7 percent last year due to the government's drive to curb credit risk and excessive factory capacity, the OECD said on Tuesday.

Strong European Data Weighs on DollarMarc to Market

Oh the thinks you can thinkFT
Discussing the megatrends. Link to full report available.

The permanent damage from the crisisFT
OECD has published its latest guess at the permanent damage from the crisis and the different causes in different countries.

An Update on May to October SeasonalityThe Fat Pitch

Macro Horizons: European Domestic Demand Perks UpWSJ

Grand Central: Will Yellen Drop a Bombshell Wednesday?WSJ
Hilsenrath’s Take: Will Yellen Drop a Bombshell Wednesday? * OECD Cuts Global Growth Forecast, Urges ECB Action * Australia’s Central Bank Keeps Interest Rates at Record Low * New Zealand Banks Aren’t Playing Ball With RBNZ * Brazil Still Grapples with Inflation Problem

US Open: Algos Concerned By USDJPY TumbleZH

Trading rules for the newly enthuasiastic retail traderAbnormal Returns

Five Things Revealed by Markit’s IPO FilingWSJ

The Complete Ira Sohn Conference Post-Mortem – ZH
Paul Tudor Jones Presentation – Value Walk
Why Bill Ackman Is Bullish on Fannie, Freddie – WSJ
David Einhorn Shorts Athenahealth; ‘Caught Up In a Bubble’ – WSJ
Notes from the Conference – The Reformed Broker
Notes: Einhorn, Tudor Jones, Shumway, Laffont & More – market folly
Thoughts on Macro Ideas from the Ira Sohn Conference – Global Macro Trading

Onko itsenäisessä keskuspankissa mitään järkeä?Tyhmyri

Sixten Korkman eurokriisistä: Katastrofilta vältyttiinVerkkouutiset

Miksi alhaisten korkojen aika?Roger Wessman

"1970-luvun politiikkaa" - Saksa ja Ranska sanasodassa euron devalvoinnistaVerkkouutiset

Italiasta uhkailuja eurosta lähdölläVerkkouutiset