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Tuesday, August 26

26th Aug - A sit-down in Ukraine, French politics

Previously on MoreLiver’s:

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Europe Bank Cleanup Driving $1.72 Trillion of Asset SalesBB
Europe’s largest banks are finally putting hundreds of billions of dollars of unwanted assets up for sale amid mounting competition among buyers and regulatory pressure. A wave of deals could be a boon to the region’s economy if the banks free up capital to increase lending.

Merkel backs Guindos as eurogroup chairFT
Selection would mark a victory for Madrid, which has long complained that Spain is under-represented in EU leadership positions

Market reaction to weakening fundamentals in GermanySober Look
Record-low bond yields, curve possibly inverting * EUR weaker

Can Mr. Draghi Get Germany To Spend?WSJ
The question now is whether Germans are more allergic to massive QE than they are to relaxing their own budget constraints?

Stuck in the Middle with Merkel? Upcoming German State ElectionsMarc to Market

The French crisis reflects the eurozone’s woesFT
France condemned by history to remain in lockstep with the Germans but clearly unable to keep up.

Hollande Bids to Quash Cabinet Mutiny With Minister MovesBB
French President Francois Hollande and Prime Minister Manuel Valls renewed the cabinet as they moved to end an internal revolt over spending cuts and limit the mutiny’s spread in their parliament group.

Hollande Replaces Cabinet as EU Austerity Rebellion StirsBB
French President Francois Hollande’s firing of malcontent minister Arnaud Montebourg risks unleashing the ruling Socialist Party’s chief critic of budget cuts, adding to an austerity backlash stirring across Europe.

Hollande replaces firebrand minister – FT
Jonathan Fenby: A day of reckoning – FT
Hollande purges leftwing rebels – FT
Profile Montebourg – loud and ambitious – FT
Insurrection forces Hollande to act – FT

Endgame for Putin in Ukraine?Project Syndicate
Vladimir Putin may (or may not) enjoy 80% public support in Russia for his Ukraine policy; but it has become increasingly clear that he has bitten off more than he can chew. The question is: At what point will his position as President become untenable?

ECB easing - will it work? No. 2: Liquidity and money market ratesDanske Bank
(see the first part, too)

The how, what, where and when of Eurozone QETradingFloor
The European Central Bank is facing mounting pressure to take steps to stimulate growth in the euro area by creating liquidity through quantitative easing (QE). Saxo Bank's Mads Koefoed shares his thoughts on when we can expect it - and what this means for traders.

Draghi May Again Find Bazooka Words Beat Action With QEBB
Since Draghi said last week that policy makers will use “all the available instruments needed to ensure price stability” and are “ready to adjust the policy stance further,” the euro has weakened and the region’s bond yields have dropped to record lows.

Durable Goods Report: July Data Dominated by Aircraft Orders – dshort
Durables Goods, Excluding Bumper Boeing Orders, Suffer Biggest Drop Of 2014 – ZH
Surge in Durables Orders Affirms U.S. Factory Pickup – BB

"Widespread Slowdown In Home Price Gains": Case-Shiller – ZH
Some See Price Gap Narrowing Between New, Existing Homes – WSJ
How Home Prices Have Slowed Down, in Five Charts – WSJ
House Prices: Real Prices and Price-to-Rent Ratio Decline in June – Calculated Risk
U.S. home prices fall in June: S&P/Case-Shiller – Reuters
Home Prices in 20 U.S. Cities Rose in June at a Slower Pace – BB

More Laid-Off Workers Are Bouncing Back, And Fewer are Taking Pay Cuts – WSJ

Consumer Confidence Rises Again – dshort
Confidence Spikes To 7-Year Highs, Near Record Divergence From UMich Sentiment – ZH
U.S. consumer confidence hits nearly seven-year high in August – Reuters
Consumer Confidence in U.S. Rises to Almost Seven-Year High – BB

Kuroda Urges ‘Visible Hand’ to Raise Japan WagesWSJ

Daily MacroWSJ
Attention still focused on Jackson Hole. Draghi’s speech continues to reverberate after he dropped heavy hints that the ECB hasn’t come to the end of what it can or will do to resuscitate the single currency’s moribund economy and prevent it from sliding into deflation. Especially after he warned that European inflation expectations were starting to worry the central bank. Elsewhere, the news gets incrementally worse on the Russia-Ukraine confrontation, the Gaza crisis, and over the Syrian-Iraqi spiral into an ever deepening and vicious sectarian civil war.

Daily Central BanksWSJ
Hilsenrath’s Take: Aircraft Orders Help U.S. Recovery, Ideas Jump Needed *Odds and Ends as Jackson Hole Notebook Closes * BOJ Pushing for Greater Global Yen Role * Draghi Brings Inflation Expectations Firmly Into Focus * Bank of Israel Cuts Key Interest Rate to Record Low

Jackson Hole fails to lift lid on rates or job numbersTradingFloor
Few surprises at Jackson Hole symposium *USD continues to be undervalued * Political concerns in France now at forefront

Are we overthinking everything in finance?TradingFloor
Finance world should more often admit lack of collective understanding * Old-school grand economic theories do not hold against today’s real-time data * Fed wise to be data driven; its dynamic approach to policy should be lauded

Recap 2014-08-25Global Macro Trading
Quick corrections followed by surges higher * J-Hole Yellen ambivalent, Draghi not as dovish as people think.

Daily ShotTradingFloor
German business confidence due to Ukraine and slowdown in Eurozone exports * 10-year Bund hits record low, 3-year government notes also go negative * Fed behind the curve on interest rate rise timeline

Today is about Politics and US Durable Goods OrdersMarc to Market

If The Fed Is Preparing For Tighter Policy, Why Are Yields Still Falling?Alpha Now

Crossing SPX 1000 in 1998 vs SPX 2000 TodayThe Fat Pitch

What keeps me awake at nightHumble Student
[US stocks markets, first part technical analysis (The easy money has been made), this one top-down macro] So far so good and I remain cautiously optimistic. However, these three tripwires bear watching as they could warn of the start of either a serious correction or the start of a bearish impulse in US equities.

Rising risk of currency market volatilityFT
Mohamed El-Erian:  After a prolonged period of monetary policy alignment, advanced economies are embarking on increasingly contrasting paths. This “multi-track” world of central banks reflects notable divergence in underlying economic performance.

Great Graphic: Currency Volatility FirmingMarc to Market

Euro To Remain Under Pressure On Worsening Rate DifferentialAlpha Now
The euro peaked against the dollar in May. Its subsequent decline was accelerated by the worsening rate differential between the yields of two-year notes of Germany and the U.S.

Avoid trying to bottom pick EURUSDTradingFloor
Bonds markets re already pricing in what the market knows. QE is coming, but whether the ECB is ready to deploy it, is another thing. The next CPI data and the declining value of EUR should follow in lockstep.

Navigaattori: Niukka vaalivoitto heikentää Ruotsin kruunuaNordea
Muita aiheita: Draghi vauhditti euron heikentymistä * Odotukset EKP:n lisätoimista painavat eurokorkoja * Raakaöljyn tuotantonäkymät vakautuvat * Osakkeiden arvostus saa tukea osinkotuotosta * Rupla kelluu vapaasti jo ensi vuonna * Korot ennätysmatalalla * Vuokrasopimuksen inflaatiosuojaus * Euroalueen inflaatio putoaa kohti nollaa

Taloudellinen katsaus elokuu 2014Aktia
Kansainvälinen talous: kasvua geopoliittisten riskien varjossa * Rahapolitiikassa EKP:n ja FEDin tiet eroavat * Euroalueella lyhyet korot pohjassa pitkään * Suomessa kasvu karkaa kauemmaksi * Venäjän talouden heikkous iskee montaa eri reittiä pitkin

Yritys nettoaa miljoonia EU-passien myynnistäVerkkouutiset
Maltan valtio ja brittiläinen Henley & Partners järjestävät asiakkailleen EU-kansalaisuuksia hieman yli miljoonan euron kappalehintaan, asiakkaina arabit, venäläiset ja kiinalaiset

Tulisiko ministerin erota?Jyrki Virolainen

Elvytys ja sen ymmärtäminen oikeinHannu Visti

Vähittäiskaupan pikaennakko: heinäkuussa myynti -0,7% YoY – Tilastokeskus
Heinäkuun työttömyysaste 7,0 prosenttia – Tilastokeskus