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Tuesday, September 2

2nd Sep - Eyes on Ukraine and ECB

Previously on MoreLiver’s:

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European Commission: ‘Germany wants a European commissioner with veto rights’voxeurop

Germany Resists Calls for ECB Aid in Euro Growth DilemmaBB
German Finance Minister Wolfgang Schaeuble said deficit-fueled growth leads to economic decline, signaling discord with Italy and France as euro-area policy makers seek ways to avoid deflation and spur growth.

Spain's 50-Year Bond OpportunismView / BB
A country's fiscal health has little bearing on how much yield investors demand to buy its bonds, and cheap central bank money has distorted the market environment to transform it into something unfamiliar -- and disturbingly hospitable to the likes of Spain.

Currency Traders Gird for Krona Risk in Sweden Vote ThrillerBB
With an election less than two weeks away, traders and investors are bracing themselves for something rarely associated with Sweden: political risk.

SNB faces classic 'trilemma' as EURCHF floor nearsTradingFloor
The worst kind of love is the unwanted oneTradingFloor

Ukraine shadow lengthens as Draghi weighs up euro action optionsTradingFloor
The ECB policy meeting later this week will undoubtedly exercise Mario Draghi as he weighs policy options for the moribund Eurozone and the euro. The Scottish referendum meanwhile is beginning to undermine the pound while Ukraine continues to set a nasty backdrop to markets.

Stabilizing Ukraine’s EconomyIMF
IMF reviews Ukraine’s economic program; unlocks additional $1.39 billion * Strong program implementation; difficult measures taken amid volatile situation * Conflict in the East, disruption in gas supplies weigh on economy and society

Ban on buying Russian bonds eyed as EU envoys meet-sources – Reuters
Putin Faces Debt to Import Curbs as EU Weighs Sanctions – BB
Weak ruble? Weaker RussiaTradingFloor
Bank of Russia Reiterates Commitment to Let Ruble Float Freely – TradingFloor
I can take Kiev in two weeks, Vladimir Putin warns European leaders – The Telegraph
Finland’s Lesson for UkraineOp / NYT

The Eurozone needs action, and ABS won't cut itTradingFloor
The economic data coming from the Eurozone is bleak, and the European Central Bank urgently needs to take action. But with the rate-reduction option off the table, what can ECB president Dragi do? Stephen Pope argues that asset-backed securities are not enough, and that sovereign debt use needs to enter the picture.

Europe risks the doldrums unless ECB acts nowTradingFloor
The market has lost confidence in the ECB, and president Mario Draghi must act to rebuild confidence. So an immediate drop in the ECB’s official rates is likely. Meanwhile there no end in sight for the declining EURUSD.

5 Things to Look Out For at Thursday’s ECB MeetingWSJ

ECB Preview: Further Measures Will Be A Close CallWSJ
Unlikely to see QE any time soon, QE not as effective as other asset purchase programs.

If ECB Does QE, It’s Another Sign of Western Governments’ FailuresWSJ
The ECB’s move underscores the abject failure of Western governments to deal meaningfully with difficult economic and demographic challenges. That abdication has left central banks such as the U.S. Federal Reserve and ECB to play an ever-larger role — one they can’t fulfill indefinitely without compromising their own integrity or the health of financial markets.

Gavyn Davies: Draghi’s incursion into fiscal policy over deflationFT
Mr Draghi is an expert in knowing exactly how far he can push the Germans. He has set his sights on an integrated growth package, including impressive structural reform in France and Italy, supported by fiscal and monetary relaxation. Slowly but surely, his message may be getting across.

Once again we wait for "shock and awe" from the ECBSober Look
The ECB (Eurosystem) balance sheet continues to decline… Anywhere else this would have been considered a massive tightening of monetary policy

Why the opponents of QE have failed to make their caseFT
The European Central Bank is the only major central bank in the advanced world that has not implemented quantitative easing – yet. A lot of arguments have been argued in defence of not following the Federal Resere, the Bank of England and Bank of Japan along the path of QE. But their validity is fast diminishing. Here is why QE’s detractors are wrong – possibly dangerously so.

Fed Positioning to Normalize PolicyTim Duy’s Fed Watch
The baseline path for interest rates is a delayed and gradual rate hike scenario beginning mid-2015.  It seems reasonable, however, to believe that the risk is that this baseline is too dovish given the general progress toward the Fed's goals, a point made repeatedly by Fed hawks.

US Labour Market Monitor: Job growth is strengthening Danske Bank

Solid ISM report supports picture of stronger job growth – Danske Bank
Markit US PMI manufacturing hits highest level since April 2010 – TradingFloor
The US manufacturing sector is booming!!! – TradingFloor
ISM Manufacturing Index: Growth Again Beats Forecast – dshort
ISM Manufacturing index increases to 59.0 in August – Calculated Risk
ISM Manufacturing Hits a Three Year High – Bespoke

Daily Central BanksWSJ
Blackstone’s Take: Euro Will be Judge and Jury for Mario Draghi * CBO, Fed Growth Forecasts Unattainable, Northwestern’s Gordon Says * Inflation Stays Below Fed’s Target for 27th Straight Month * BOJ May Be Reluctant to Affirm Positive Economic Cycle * Australia Central Bank Holds Interest Rates Steady

Daily MacroWSJ
The focus this week is on the European Central Bank’s policy meeting on Thursday. Although there’s talk the ECB might launch quantitative easing as early as this month, this seems unlikely. The central bank will want its policy initiatives announced in June to fully take effect before doing yet more. Elsewhere, the U.K. is increasingly focused on the Scottish independence referendum, due to be held on Sept. 18. The latest opinion polls have unsettled markets, triggering sterling weakness, but it’s still unlikely the Scots vote to split off from the U.K.

Blogs review: The bond market conundrum reduxBruegel
Fed tapering was widely expected to push up US yields. Instead, US yields have fallen since the beginning of the year, raising the question of whether we’re seeing a new version of the Greenspan 2005 conundrum. Interestingly, a successful explanation of this new conundrum cannot just rely on a flight to safety explanation as it also needs to rationalize why 5-year yield and 10-year yield have diverged over the same period.

What Happened Monday and a Look ForwardMarc to Market

Banks say funding rules will make key equities trades more expensiveCNBC
Banks are sounding the alarm about a proposed global rule aimed at forcing them to fund themselves more safely, warning that it could have "severe" knock-on effects on short selling and other important equities market transactions.

Investment Outlook: QE isn't the answer for EuropeTradingFloor
Global equities are setting new highs, and interest rates have fallen substantially. So far, 2014 has been a pretty decent investment year, with the US in a full-blown economic expansion. However, in Europe, the picture is different.

Näkökulma: Onko Kataisen pesti tärkeä vai ei?IL

Varakkaat suomalaiset katumapäälläYLE
Paljastivat verottajalle Sveitsiin piilotetut omaisuudet

Keskusta ohitti kokoomuksen, SDP nousi kuopastaYLE
Pääministeri Stubb ei halunnut kommentoida tuoreita kannatuslukuja Yle Uutisille.

Nato-haukka – Mikä se on?Jukka Hankamäki
Mikä NATO on? – Atlantti-seura