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Tuesday, August 5

5th Aug - European worries, for a change

Previously on MoreLiver’s:

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Focus Germany: Weaker recovery in H2DB Research
Economic growth probably suffered a worse setback in Q2 than initially presumed. We only expect stagnation now, but would no longer rule out a minimal decline.

Here, take your cash. We don’t want itFT
From Goldman on the state of European corporate investment… or what happens when a yield hunt meets corporates who are running out of investment ideas:

Greek Bonds Tumble As Troika Gives Up And Goldman Downgrades PeripheryZH
Italy and Portugal: All Juiced Out? Goldman Thinks SoWSJ

CDS changes too late for BES bondholdersReuters
A flaw in the old contract means the CDS are unlikely to pay out even though junior bondholders in Banco Espirito Santo were effectively wiped out over the weekend

The euro as a precursor to BitcoinFT

Austria's Savings Banks Are On Their Own As Government Withdraws SupportForbes

The Vladimir Putin School of LeadershipBB

Economists Prove The Success of ECB’s OMTWSJ

ECB 'won't move a muscle' despite deflation fearsCNBC
The ECB is expected to hold fire at its monetary policy meeting this week, despite a shock fall in inflation reigniting deflation concerns.

ECB's Draghi to meet EU Commission head Juncker on Wednesday: sourceReuters

UK May be Further from Full Employment than BOE ThinksWSJ
BOE Underestimating Slack in U.K. Economy, Blanchflower SaysBB

Chart: The UK reaching pre-crisis GDP levelsBruegel
In the context of long-term growth, the British performance is less impressive

BOE’s Haldane Asks Where Next for Central Banking?WSJ
In one scenario, central bankers once again fade into the background. In the other, they are never far from the front pages. In Mr. Haldane’s analysis, the outcome will depend on how the financial system evolves.


U.K. Services Surge at Fastest Pace in Eight Months – BB
Volume of retail trade up by 0.4% in euro area – Eurostat
Private consumption forecast up after increase in euro retail sales – Danske Bank

Naming the Biggest Losers in AmericaBB
Barry Ritholtz: Congress is a national embarrassment. That sentence is one we all have believed at one time or another to be true. But the sentence I never imagined I would ever write is this: Thank goodness for the Federal Reserve.

Goldman Sachs: Here’s What Will Happen When Fed Raises RatesWSJ

U.S. services sector growth dips in July, still strong: Markit – Reuters
ISM Non-Manufacturing Index increased to 58.7% - Calculated Risk
ISM non-manufacturing hits highest since December 2005 – TradingFloor
Service Industries in U.S. Expand at Fastest Pace Since 2005 – BB
U.S. factory orders rise solidly in June, inventories slow – Reuters
ISM Non-Manufacturing: July Composite at Record High – dshort
Non-Manufacturing ISM Soars To 9-Year Highs Months After Hitting 4-Year Lows – ZH
Upside Surprise in ISM Services – Bespoke

Are financial conditions in China too lax or too stringent?Bruegel

Can Japan Afford to Cut Its Corporate Tax?imfdirect

What the markets are telling us about JapanThe Money Illusion

China Services PMI Crashes To Record Low – ZH
China July official services PMI dips to 6-month low – Reuters
China Services Index Falls to Record Low – BB

Daily Central BanksWSJ
Schlesinger’s Take: BOJ Focused on the Full Half of the Glass * Fed Survey: Mortgage Standards Ease for First Time Since Housing Bust * Bank Indonesia: Focus Remains Combating Inflation * India’s RBI Leaves Key Rate Unchanged * Kuroda Urges Kids to “Experience” Life

Daily MacroWSJ
The question now is whether frayed nerves have been repaired enough to allow a sustained recovery in the market. The wild card really continues to be the Federal Reserve, and the question of when it will decide to raise rates, and to a lesser degree the policy decisions of two big central banks of Europe, the Bank of England and the European Central Bank. A big slowdown in services activity in China reported earlier won’t help.

Great Graphic: Wages and ProductivityMarc to Market
Never before have the major central banks so strongly advocated higher wages….even in [Germany] in which labor apparently has a strong voice, represented on boards of directors of large companies, wages have not kept pace with productivity around 17 years.  

Services PMIs in FocusMarc to Market

Recap 2014-08-04Global Macro Trading
The NYFRB posted about financial stability, which provides a good glimpse of where the FOMC sees dangers in the system, and more interestingly, where they look.

FX and the normalisation puzzleTradingFloor
Today, we take a look at broader market sentiment and dissect the recent flow of data from the US, UK and Eurozone. Ultimately, we feel that a number of key themes are likely to re-assert themselves as we move further into Q3.

Inflation Adjusted Bond Prices Tell Different Story on Relative ValueEconmatters
The US 10-YEAR Yield is not that attractive relative to European Bond Yields, in fact US bonds are downright expensive in terms of price versus the inflation adjusted yield I am getting as an investor.

Hallitus työnsi päänsä syvälle pensaaseenKL
Kommentti: Ei hetkauta meitä, sanoo hallitus Venäjä-pakotteistaMTV3
EU arvioi, että talouspakotteet vaikuttavat Venäjän kansantalouteen viisi prosenttia. Valtiovarainministeriö, valtiovarainministeri Antti Rinne (sd.) ja pääministeri Alexander Stubb (kok.) tuntuvat olevan kuitenkin sillä linjalla, että Suomeen tämä ei vaikuta. Ehkäpä herroihin ja hallitukseen vaikuttaakin enemmän tulossa oleva vaalivuosi ja se, ettei positiivisia ennusteita uskalleta muuttaa ettei lisäsäästöjä tarvitse tehdä?

Suomen nettomaksu EU:lle laskiVerkkouutiset
Suurimmat nettomaksajat suhteessa bruttokansantuloon vuonna 2013 olivat Ruotsi (-0,51 %), Tanska (-0,49 %) ja Saksa (-0,49 %). Ranskan nettomaksu suhteessa bruttokansantuloon oli -0,40 prosenttia...Suurimmat nettosaajat bruttokansantuloon suhteutettuna olivat Unkari (5,33 %), Liettua (4,54 %), ja Viro (4,33 %).