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Thursday, December 11

11th Dec - Mediocre TLTRO pushes ECB to QE?



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EUROPE
Eurozone Comes Back to Reality With a CrashWolf Street
Any lingering hopes that the debt crisis was put to rest are brutally dashed.

Luxembourg tax files: Juncker ‘solved problems’ for Amazon moveThe Guardian
Web retailer’s former tax expert claims EU chief presented himself as a business partner who ‘helped solve problems’

New Leak Reveals Luxembourg Tax Deals for Disney, Koch Brothers EmpireHuff

Juncker to scrap air and waste proposalsEuropean Voice
A leaked draft of the 2015 Commission work programme prioritises energy and the digital agenda, and contains a long list of proposed legislation to be axed.

Helikoptersläpp - nästa års julklapp?Nordea
Detta är en personlig betraktelse och inte Nordeas åsikt om vad Riksbanken bör göra. Det är inte heller Nordeas prognos på penningpolitiken framöver.

Norway's central bank shocks with rate cutFT
Norges Bank’s Shock Rate Cut Drives Krone to Lowest Since 2009BB

BOE’s Carney Wants Fed-Style Schedule in MPC Decision RevampBB
The BOE plans to change to eight meetings a year in 2016 from one a month currently and start releasing immediate minutes as Governor Mark Carney overhauls the monetary-policy framework set up more than 17 years ago.

  GREECE
Greek Stocks Crash, Default Risk Spikes After PM GREXIT CommentsZH

Greek Crisis 2.0 Leaving Other Bailout Patients UnscathedBB

Greece’s Syriza softens its sharp edgesFT
Market panic belies the fact that the party’s stance is shifting

Greek candidate willing to call European leaders’ bluffThe Telegraph
Alexis Tsipras told Greek voters as recently as last week that his government would cease to enforce the bail-out demand

  OTHER CRISIS COUNTRIES
France unveils steps to revive economyFT
Measures include move to allow shops to open more often on Sunday

Italian banks hold record levels of government debtIFR
Banks bought €18.4bn of Italian treasuries in September, suggesting that a part of the TLTRO money is being parked in government bonds.

Renzi vows crackdown on corruptionFT
Pledge comes amid claims of Mafia bribing politicians

  EUROPEAN CENTRAL BANK
Europe’s guardians of monetary orthodoxy need not fear the printing pressFT
Reza Moghadam: The case for quantitative easing is compelling but it requires broad support.

ECB numbers gameReuters
The ECB will likely end the year having succeeded in expanding the euro zone’s monetary base by about 250 billion euros. With proceeds from a previous LTRO operation being paid back early next year, the net result is that the balance sheet could even shrink. Given that, it’s hard to see the ECB failing to take the ultimate leap now.

Oil May Hold Key to ECB QEWSJ

ECB's loans offer clues in quantitative easing guessing gameReuters

Crunch loan offer may hold key to next ECB policy moveReuters

Longer Term Refinancing Op.-Allotment ECB
ECB’s liquidity auction falls short of expectationsFT

ECB: This easing not pleasingNordea
The second TLTRO saw demand of EUR 130bn, meaning banks took only just over half their maximum initial allowance in the first two TLTROs. These numbers will not take the ECB far in reaching its balance sheet target, and broad-based asset purchases are coming early next year. Core bond yields still have a bit more to fall and the euro should feel pressure from the upcoming purchases.

Euro banks took EUR130bn in the December TLTRODanske Bank
Not enough to reach the ECB's balance sheet target

Second ECB TLTRO Also Flops, Bank Take-Up Far Less Than ExpectedZH

ECB Case for QE Boosted by Muted Long-Term Loan Take-UpBB

Thanks but no thanksThe Economist
There will be six further tenders at quarterly intervals until mid-2016. But the terms on which the funding will be made available will be more onerous since banks will actually have to increase their net lending in order to be eligible. What this suggests is that the ECB will have to use other means than lending to banks.

Banking Turkeys Vote for Christmas in TLTROFT
The lack of demand for the ECB money suggests banks saw no way to redeploy those funds profitably.

TLTRO torpor demands 'kinetic energy' – TradingFloor
Disinflation is a major concern within the Eurozone and given that the principal objective of the ECB, as crafted into its charter, is price stability, Mario Draghi will see today’s TLTRO as a major disappointment.

Barry Eichengreen: Putting Deflation FirstProject Syndicate
The best thing the ECB could do to encourage fiscal consolidation and structural reform is to banish the specter of deflation. Only full-bore quantitative easing can do that. Those who object that such audacity would discourage fiscal consolidation and structural reform should consider what deflation would do.

Monthly Bulletin Dec 2014ECB

  MACRO NUMBERS
Swedish inflation falls to negative 0.2 per cent – FT
French inflation rate falls back to five-year low – FT

UNITED STATES
Jean-Claude YellenKrugman / NYT
My guess is that the Fed, given an improving US job market, is strongly tempted to buy some peace by hiking rates a little, just to quiet the critics for a few months.

The Fed prepares to make a mistakeThe Economist
While job growth in America is hustling along, inflation remains well below the Fed's target rate.

Challenging the FedTim Duy’s Fed Watch
If you want to know what the Fed is thinking at this point, a journalist needs to push Yellen on the secular stagnation issue at next week's press conference. Does she or the committee agree with Fischer?

Graphics: America shaking off its addiction to oilBB

  MACRO NUMBERS
Advance retail sales – US Gov
Retail Sales increased 0.7% in November – Calculated Risk
Solid U.S. retail sales point to brisk consumer spending – Reuters
Retail Sales in U.S. Increase by Most in Eight Months – BB
Strong holiday shopping in the USDanske Bank

ASIA
Japan bears bet on Abe victory followed by yen disasterCNBC

OTHER
Daily Central BanksWSJ
Hilsenrath’s Take: Rising Dollar and Falling Oil Could Be Recipe for a U.S. Asset Boom * Bank of Canada Says Housing Prices, Debt Pose Stability Risk * China Injects $65 Billion Into Banking System * Weak Demand for Loans Raises Hopes for ECB Stimulus * Russian Central Bank Raises Rates to Address Sliding Ruble

Daily MacroWSJ
Anyone hoping for the U.S. economic recovery to have positive ripple effects on the rest of the world continues to be disappointed…the legacy of inflation built up from the previous cycle and the existence of strict targets are holding back some central banks that might otherwise be more aggressive right now.

Danske DailyDanske Bank

Nordea MorningNordea

FI Eye-Opener: Still going downhillNordea
German 10-year yield with another record low – US yields fall more. Core bonds to remain supported today. Greek default worries re-emerged. Equities under more pressure. Oil prices still in free fall. French reforms showing some progress, but more needed. Second TLTRO to lack in demand as well. Aversion of US government shutdown not a done deal yet. 30-year bonds offered in the US.

Big Moves, but Markets Trying to StabilizeMarc to Market

US OpenZH
Central-Bankers Have Their Hands Full As 30 Year Yield Falls Below 2014 Lows

Daily ShotTradingFloor
Household confidence in Japan has fallen back to levels we saw at the time of the consumption tax hike.

FX UpdateTradingFloor
TLTRO auction results, Norges Bank and SNB dead ahead

G-20 Economic Growth Picked Up in Third QuarterWSJ

ECB vs Fed stimulus in two charts FT

FINNISH
AamukatsausNordea
Venäjän keskuspankki nostaa, vaikka vaan varmuuden vuoksi | Norjan keskuspankki yllättää tekemättä mitään | Tänään lisäelvytyspuheet saavat lisäpontta euroalueella

Euro ja talous 5/2014: Talouden näkymätSuomen Pankki
Kuukausikatsaus joulukuu 2014Suomen Pankki
Pitkän aikavälin talousnäkymistä ja politiikkatoimistaSuomen Pankki

Suomen Pankilta synkkä ennuste Suomelle: Historiallisesti poikkeuksellistaMTV
”Historiallisesti poikkeuksellista” – Suomen Pankin mukaan maan talouden lähivuosien näkymät ovat heikentyneet edelleen.

Suomen Pankki: Talouden elpyminen käynnistyy vaivoinYLE
Suomen Pankin ennusteen mukaan talouden lähivuosien näkymät ovat heikentyneet maassamme edelleen. Työttömyysaste pysyttelee noin 8,5 prosentissa. Pankki arvioi tilanteen vakauttamisen edellyttävän jatkotoimia talouden rakenteiden uudistamisessa ja julkisen talouden sopeuttamisessa.

Soini Rinteelle: ”Saako suomalainen sadan vuoden lainan nollakorolla?”PS

Deflaatio – hyvä, paha ja ruma Roger Wessman

Tuloerot ja talouskasvuHannu Visti
Päivän nettipläjäys on ollut OECD:n raportti, jossa kerrotaan tuloerojen tekevän pahaa talouskasvulle. Tätä on toistanut jokainen vasemmalle kallellaan oleva ja jokunen muukin.

Vastakkainasettelun aika on tulossaRisto Pennanen / TalSa
Suomen pirstoutuminen ja talouskasvun hiipuminen lisäävät vastakkainasetteluita väistämättä.

Korkman: Olemme syvällä suossaTalSa
Aalto-yliopiston professori Sixten Korkman patistaa työmarkkinakenttää nollapalkkaratkaisuihin vielä ennen uutta vaalikautta. Vastineeksi hallitus voisi alentaa arvonlisäveroa.

Kreikan tie voi viedä kohti euron takaoveaHS