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Wednesday, December 10

10th Dec - Divergences of all kind

Previously on MoreLiver’s:

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Margin Wolf: Europe’s lonely and reluctant hegemonFT
Berlin must broaden its outlook and applaud domestic demand – also on Youtube

Keep beholding the (German) EuroglutFT
Europe’s huge excess savings combined with aggressive ECB easing will lead to some of the largest capital outflows in the history of financial markets… a rising German preference for non-Euro denominated assets, particularly fixed income.

Likely Unlikelies 2015: Euro area - phoenix riseNordea
Being cautious about the outlook for the Euro-area economy in recent years usually meant being right. Factors holding back growth still get more attention than positive developments. Therefore, it could be that forecasters don’t recognize an upswing because they haven’t seen one for so long…

5 elections That Could Make the Unthinkable Happen in EuropeEconmatters

Ten questions on the Eurozone, with ten answersYanis Varoufakis
What would BoE rate hikes do to UK households?FT

Raise Rates Soon to Keep Increases Gradual, Says BOE’s McCaffertyWSJ

The Goldman touchCoppola Comment
Scheme has two purposes: overtly, it is to increase investment across the EU - and covertly, it is to circumvent the treaties that prevent the ECB from financing sovereign investment.

Daniel Gros: Europe’s Misguided Investment ManiaProject Syndicate
The lynchpin of the new European Commission’s economic strategy is its recently unveiled plan to increase investment by €315 billion ($390 billion) over the next three years. But the Commission’s proposal is misguided, both in terms of its emphasis on investment and its proposed financing structure.

Look, no gilts: why ECB should ape BoEFT
Setting up an asset purchase facility is best way to implement QE

ECB: December TLTRO: larger but not large enoughNordea
We expect the uptake in Thursday´s TLTRO to reach 120bn (vs consensus around 150bn), larger than the September tranche of 83bn but again likely in the lower part of the ECB´s range of expectations. Net, the uptake may not necessarily be much larger than the first operation which enhances the probability of QE. Market wise, opportunities persist and we continue to like Eonia flatteners and also option-structures aimed at short rates remaining anchored or going even lower on more ECB easing.

Bad News for ECB Loans May Be Good News for QE-SeekersBB
A repeat of the lackluster demand seen in the first round could signal that the central bank now has little choice but to step up its unconventional stimulus to include buying government debt.

EU states act to curb migrants but London alone in seeking capFT
Britain is far from alone when it comes to launching voter-friendly moves against immigration from other EU states. Berlin has made plans to limit the stay of unemployed migrants from elsewhere in the bloc, while Paris has promised to crack down on abuses of social security benefits.

We expect the ECB to announce government bond purchases in Q1Danske Bank

Leaked EU summit conclusions: Draghi left hanging?FT
Draghi won’t have the normal political cover he needs to make a bold decision early next year… Does that mean Draghi can’t act? Hardly. But with opposition to QE rising both within Germany and the ECB governing council, it certainly makes it politically more difficult for the normally persuasive Italian.

The Fed and oil: 2014 is not 2011 in reverseFT
Call the tradeoff what you will, but the risks of an early rate rise still seem greater than those of delay. Comparisons to 2011 don’t much alter the thinking behind this conclusion.

China’s changing monetary policy, chartedFT

Economists React: China Inflation Hits Five-Year LowWSJ

China: does disinflation really warrant a rate cut? Nordea

Daily Central BanksWSJ
Hilsenrath’s Take: Let’s Go Back to the Future in Fed Language Discussions * Fed Proposes Extra Capital Requirement for 8 Biggest U.S. Banks * Global Economic News Coverage Shows More Chatter About Easier Monetary Policy * ECB’s Hansson Contradicts Other Officials on Quantitative Easing * Job Turnover Climbs While Hiring Remains Near Fastest Pace Since 2007

Daily MacroWSJ
Global markets are still jittery. The sharp gains seen in the yen Tuesday, when global investors rushed to the Japanese currency as a safe-haven play, have on Wednesday translated into the biggest loss in three weeks for Japan’s stock market. And in the eurozone, nervousness persists over the Greek political situation

Danske DailyDanske Bank

Nordea MorningNordea
Weak Chinese inflation * Heightened political unrest in Greece

FI Eye-Opener: Bloodbath in Greek markets - for the umpteenth timeNordea
Core bonds with more gains – German 10-year yield falls to record lows. Core yields likely to edge higher today after yesterday’s falls. Greek bonds and equities hit hard. Soft Chinese inflation data supporting equities. ECB overwhelmingly supporting QE. US government shutdown averted once again. Light data calendar. German and US supply.

ECB:  Europe Can't BendMarc to Market

China's Stock Market Whiplash Extends As Greece, Crude Slump More

From the floor: Risk-off rules the dayTradingFloor
The shock of Greece's election call continues to rile markets and sentiment has made a firm swing into risk-off mode. Overnight, the Nikkei fell, the Shanghai composite rose, yen crosses all corrected and oil price fears continue to weigh on Norway's krone.

Three Charts to Challenge 2015 Investment StrategiesZH

This Chart Shows Which Countries Get Mauled the Worst by the Oil BustWolfstreet

Outrageous Predictions for 2015 is out! TradingFloor

Bank of America sees $50 oil as Opec diesThe Telegraph
"Our biggest worry is the end of the liquidity cycle. The Fed is done. The reach for yield that we have seen since 2009 is going into reverse”, said Bank of America.

2015 Outlook – Global Credit ConditionsMoody’s
The world’s economies are adjusting to new positions in their historical growth cycles with varying and sometimes counter-intuitive implications for the credit markets (free registration required)

Mohamed El-Erian: A Year of DivergenceProject Syndicate
In the coming year, “divergence” will be a major global economic theme, applying to economic trends, policies, and performance. As the year progresses, these divergences will become increasingly difficult to reconcile, leaving policymakers with a choice: overcome the obstacles that have so far impeded effective action, or risk allowing their economies to be destabilized.

Political unrest is always and everywhere a monetary phenomenon – also in GreeceMarket Monetarist

Epävakaa Kreikka * Vieraskynä: Ruotsi suomettuu – miten käy kruunun? * Kiinasta pehmeitä inflaatiolukuja

KorjausliikeHenri Myllyniemi / US
Eurokriisi kytee taas KreikassaJan Hurri / TalSa

Pääkirjoitus: Kaikki tepsivät keinot tekevät kipeääHS

OECD: Tuloerojen kasvu hidastaa "merkittävästi" talouskasvua TE
OECD kertoo, että tuloerojen kasvu on leikannut Suomen talouskasvusta 9 prosenttiyksikköä 1980-luvun jälkeen, saman verran kuin Norjassa ja Isossa-Britanniassa.

Raimo Sailas: Euroopan näivetystauti näyttää pitkittyvänHS

FK: Kriisirahastosta iso lasku suomalaisille pankeilleVerkkouutiset

Veikkaus on erilainen asiattomin silminAsiaton lehdistökatsaus

Ulkomaalaistaustaisten määrä ylitti 300 000 rajan – Tilastokeskus
Teollisuustuotanto lokak. -0,4% YoY – Tilastokeskus
Suomi: Teollisuuden tilaukset nousussa – Nordea
Metallialojen vaikutus teollisuustuotannon pudotukseen suuri vuonna 2013 – Tilastokeskus
Teollisuuden uudet tilaukset lokak. +3,9% YoY – Tilastokeskus
Tehdyn työtunnin kustannus Q3 +0.8% – Tilastokeskus