Previously
on MoreLiver’s:
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EUROPE
There’s a nice little
storm brewing in the Eurozone core. Reuters reports that the German province of
Bavaria is considering legal action against Austria. And it is seeking support
for its action not only from the German federal government, but also from the
EU.
Hard Truths About Europe’s Soft Power – Project
Syndicate
Europeans may be
“postmodern,” but the rest of the world is not. Even a cursory glance at
Europe’s neighborhood demonstrates the limitations of “soft” power and dispel
hopes that emerging powers can be house-trained as “responsible stakeholders”
in a Western-designed international system.
Two Years Ago, Banking Union Was Euro Crisis
Turning Point – PIIE
Banking union is no
panacea. The ECB could still be less than rigorous in its bank review this
year, which would squander the opportunity to restore trust. Several countries
face disquieting medium-term economic, social, and fiscal prospects. Perhaps
the wildest card now that perceived sovereign credit risk has abated is that EU
institutions remain in a state of flux. As the center gains increasing
discretionary authority, new channels of democratic accountability must develop.
Only 8% of banks says they will need to raise
capital after AQR – Bruegel
Ernst and Young has published
this week their European Banking Barometer for the first half of 2014, which
gives a very interesting snapshot of the banking sector’s perceptions about
macroeconomic outlook as well as an indication of their priorities for the next
moths. Among other issues, it also includes interesting insights on banks
perception of the capital needs that will result from the ECB’s assessment.
Findings confirm that uncertainty still prevails.
Europe has wasted a good crisis – Bruegel
In a crisis, when
Europe stumbles, it gets up to move forward. Not this time.
Lagarde's Error Could Be Costly For The Euro
Area – Forbes
Frances Coppola: Although
the IMF’s Article IV findings were grim, the recommendations, if implemented,
would help to generate recovery. But they seem likely to be ignored.
Brussels round up – Europp
/ LSE
EU happiness ratings,
Juncker’s triumph and Poland’s bugging scandal
Euro Debt Constraining Growth – FT
Ralph Atkins, the FT’s
capital markets editor, discusses high private sector debt levels in the
eurozone with Moritz Kraemer, S&P’s chief sovereign ratings officer. Mr Kramer
says Europe is ‘in for the long haul’ on debt deleveraging.
Spain’s economic recovery, largely
export-driven – The
Economist
France and economic reforms: stagnant economy
and hard to improve – The
Economist
JUNCKER
& NEW COMMISSION
The accidental president – The
Economist
Jean-Claude Juncker
will be the next commission boss, even though nobody wants him
7Juncker nominated for top EU job – FT
Former Luxembourg PM
gets backing of 26 heads of states
Britain takes dramatic step towards EU exit
door as Jean-Claude Juncker elected Commission president, leaving Cameron
humiliated – Daily
Mail
Cameron: I've lost the battle over Juncker, but
not the war – The
Telegraph
David Cameron has told
the EU leaders they 'could live to regret' naming Jean-Claude Juncker as the
European Commission president
Looking Beyond Juncker – Project
Syndicate
Howard Davies: Though
the European Commission presidency is an important job, proposing new
legislation is something of a luxury for Europe these days. Rather than
contemplating new directives on the desirable characteristics of, say,
lawnmowers sold in the EU, Europe’s leaders must complete three urgent and
interlinked tasks.
The summit that will go down in history – FT
The EU’s other large
countries – France, Germany, Italy, Poland and Spain – have sided against Mr
Cameron on this occasion. But in private their leaders will be wondering if,
one day, Friday’s precedent will rebound on a different big country, causing it
to be outvoted on an issue it regards of fundamental importance.
BANK OF
ENGLAND
The BOE’s Imprudent Policies – WSJ
The BoE Tuesday
outlined measures to limit the U.K.’s housing boom and prevent a dangerous
bubble. But the subtext of its message was rather different: keep borrowing.
Carney’s (old) new normal – FT
Interest rates would
be materially lower in future than the 5 per cent rate widely seen as normal
before the crisis. The Bank of England governor’s words have been widely
reported as a big new statement of policy. Is this a new policy? No.
EUROPEAN
CENTRAL BANK
ECB’s Uncomfortable Waiting Game – WSJ
The ECB has two big
concerns. One is the state of the euro zone’s second largest economy, France.
The second is a continued downward inflationary trend across the region.
ECB preview: Don’t postpone your holiday for
this – Nordea
After all the
excitement the ECB offered in June, the July meeting is set to be far less
eventful. No new signals or easing measures are in store, nor are likely to be
under consideration for several months. Considering how far rates and yields
have fallen already, risks are tilted towards a small rebound higher in long
yields and euro and a steeper curve.
Benoît Cœuré Interview with Süddeutsche Zeitung – ECB
Interview with Benoît
Cœuré, Member of the Executive Board of the ECB, and Werner Rätz and Mischa
Aschmoneit of Blockupy, 28 June 2014
MACRO
NUMBERS
EU economic sentiment takes a summer break – TradingFloor
The European
Commission's Business & Consumer Survey for June showed the Eurozone's
overall sentiment falling against expectations of a small improvement. While
this is temporary as Asia is turning around, France's difficulties are real and
Spain is looking better than Italy.
German inflation higher than expected in June – Danske
Bank
Based on the German
HICP figure, we revise our euro inflation forecast up to 0.7% y/y from an
initial forecast of 0.5%.
German Inflation Ticks Up: Implications for EMU
and ECB – Marc
to Market
This immediately
indicates risk that the preliminary euro area figure, to be reported on Monday,
is on the upside. The consensus had been
for a 0.5% rise of the year-over-year rate.
Now it is reasonable to expect a 0.6% or even 0.7%.
UNITED STATES
US inflation has climbed. Now what? – FT
Observations on Alternative Measures of
Inflation (Part 3) – Macroblog
Excess reserves and inflation risk – MacroMania
ASIA
After Tax Increase, Signs of Recovery in Japan
Consumption – WSJ
Reform in Japan: The third arrow – The
Economist
Shinzo Abe has the
best chance in decades of changing Japan for the better. He seems poised to
take it
Abenomics picks up speed: The battle for Japan – The
Economist
Shinzo Abe’s fight to
reshape Japan’s economy and society is entering a new phase