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Wednesday, June 25

25th Jun - US Q1 GDP disappointed, European politics

Previously on MoreLiver’s:

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European bank performance: Bottoming outDB Research
Current results are still very weak, with total revenues and profits both at the lowest level since 2009. But the largest European banks can justifiably draw hope from a stabilisation in interest income as well as fees and commissions, from declining loan loss provisions and shrinking expenses. The bottom line may have broadly bottomed out, though pressure from litigation charges and the ECB’s balance sheet assessment remains high. New record capital levels abound.

Greek debt restructuring: Lessons
The 2012 Greek debt restructuring was the largest one in the history of sovereign defaults. This column discusses the lessons from this historically unprecedented episode. Delaying the restructuring implied that externally held debt remained higher than it would have been otherwise. Supportive crisis management is necessary for smooth restructuring to take place in a currency union.

The euro macro trade?FT
Euro’s correlation with stocks has turned negative following the ECB’s swarm attack earlier this month. If you’re feeling optimistic, it could be the signal for a Japan-style period of asset outperformance and currency underperformance

The Simple Reason Why Everyone's Wrong On The 'Short Euro' TradeZH
Globalization has collapsed dramatically since 2007, and that collapse in globalization has profound implications for financial markets. The collapse in globalization is nothing to do with global trade.

Nordic Outlook June 2014Danske Bank
Denmark: We have been waiting for a long time but at long last the recovery seems to be taking hold * Sweden: The Riksbank is set to cut the repo rate and keep it ultra-low for ultra-long * Norway: Oil investment likely to hurt GDP growth, we expect slower growth due to lower growth in oil but still high levels of activity * Finland: The third year of decline, still trapped in recession but should recover in 2015

Brussels job rotationVolkskrant
The probable nomination of the President of the European Commission at the European Council in late June is only the first stage in a process that will renew the leadership of European institutions — a political and diplomatic game of musical chairs marked by rituals and secrets that is played out between the capitals of the continent.

Jakobsen: Why Juncker's EU appointment would be a 'violation'TradingFloor
If, as expected, Jean-Claude Juncker is soon appointed President of the European Commission, it would be a "total violation" of the results of last month's European elections which saw a big rise in support for anti-Europe parties.

Italian EU Council presidency: Further softening of stability pact not a good ideaDB Research

French Growth to Miss Hollande’s Target in 2014, Insee SaysBB
Summer Clouds Settle On French EconomyWSJ

EU Summit preview: Flexible, more flexible, Cameron?Merkelnomics

Europe needs new investment, not new rulesBruegel
In my view, the EU must avoid another useless fight over its fiscal rules and instead use political capital to foster growth. A deal could be designed along 3 central elements.

Yellen may be poised to rewrite Fed's rule book on wages, inflationReuters
Yellen wants to see U.S. wages climb at a much brisker clip to boost consumer spending and help workers recoup ground they lost in the last recession, but she'll have to fend off policymakers who fear that could cause inflation to surge.

Observations on Alternative Measures of Inflation (Part 2)macroblog
Refresher: CPI and the PCE DeflatorMarc to Market

Final Q1 GDP Crashes To -2.9%, Lowest Since 2009, Far Below The Worst Expectations – ZH
Economists React to Q1 GDP Revision: ‘Different Shades of Nasty’ – WSJ
5 Things to Know About the Latest GDP Report – WSJ
GDP Q1 Third Estimate Plunges to -2.9% - dshort
Why the GDP Report Stinks, And Why Nobody Cares – WSJ
Q1 GDP Revised Down to -2.9% Annual Rate – Calculated Risk
The economy shrank almost 3 percent in Q1. Holy guacamole. – WaPo
Real GDP Per Capita Sinks to -3.53% - dshort
U.S. economy collapses in first quarter, but growing again – Reuters
U.S. Economy Shrank in First Quarter by Most in Five Years – BB
Q1 GDP Plunging at a Nearly -3% Annual Rate – dshort
Merrill Lynch on Q1 GDP Revision – Calculated Risk
Visualizing GDP: Dissecting the Q1 Third Estimate – dshort

Durable Goods Orders Tumble; Biggest Miss In 2014 – ZH
Durable Goods Report: May Weakness – dshort
The "Real" Goods on the Today's Durable Goods Data – dshort
U.S. durable goods unexpectedly fall in May – Reuters

Equipment Orders Bolster Case for U.S. Growth Snapback – BB
Slower home price increases in the US – Sober Look
US services sector expands at fastest pace in four-and-a-half years – Reuters

China Local Debt Growth Slows as Economic Expansion CoolsBB
China’s chief auditor said growth in local government debt slowed, a sign that tighter scrutiny on borrowing and an economic slowdown have curbed credit.

Daily Central BanksWSJ
Hannon’s Take: The Unreliable Nature of Forward Guidance * Fed Gives Banks Extra Time on Capital Plans * Fed’s Dudley Says Rate Outlook Depends on Economy * Euro Zone Banks Grumble Over Supervision Fees * Hungary Cuts Key Rate to New Record Low

Daily MacroWSJ
Some believe the historically low volatility we have seen until now is a sign of investor complacency, a situation that is inevitably vulnerable to a wake-up call. That makes intuitive sense. But as readers of this column will know, there has been no shortage of external shocks with the potential to trigger some kind of selloff, yet there has been very little follow through.

FX: Watching Paint Dry?Marc to Market