W/E:
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EUROPE
European bank performance: Bottoming out – DB
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 learned – voxeu.org
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' Trade – ZH
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 2014 – Danske
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
POLITICS
Brussels job rotation – Volkskrant
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 idea – DB
Research
French Growth to Miss Hollande’s Target in
2014, Insee Says – BB
Summer Clouds Settle On French Economy – WSJ
EU Summit preview: Flexible, more flexible,
Cameron? – Merkelnomics
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.
UNITED STATES
FEDERAL
RESERVE
Yellen may be poised to rewrite Fed's rule book
on wages, inflation – Reuters
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 Deflator – Marc
to Market
MACRO
NUMBERS
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
Slower home price
increases in the US – Sober Look
US services sector expands at fastest pace in four-and-a-half years – Reuters
ASIA
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.
OTHER
Daily Central Banks – WSJ
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 Macro – WSJ
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