11th Dec - Mediocre TLTRO pushes ECB to QE?

Previously on MoreLiver’s:

Guest: The QE MacGuffin

Wednesday: Divergences of all kind

Tuesday: Greece & China in headlines

Monday: Eurocrisis suggested

W/E: Linkfest

W/E: Weekly Support (updated)

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EUROPE

Eurozone Comes Back to Reality With a Crash – Wolf Street

Any lingering hopes that the debt crisis was put to rest are brutally dashed.

Luxembourg tax files: Juncker ‘solved problems’ for Amazon move – The 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 Empire – Huff

Juncker to scrap air and waste proposals – European 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 cut – FT

Norges Bank’s Shock Rate Cut Drives Krone to Lowest Since 2009 – BB

BOE’s Carney Wants Fed-Style Schedule in MPC Decision Revamp – BB

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 Comments – ZH

Greek Crisis 2.0 Leaving Other Bailout Patients Unscathed – BB

Greece’s Syriza softens its sharp edges – FT

Market panic belies the fact that the party’s stance is shifting

Greek candidate willing to call European leaders’ bluff – The 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 economy – FT

Measures include move to allow shops to open more often on Sunday

Italian banks hold record levels of government debt – IFR

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 corruption – FT

Pledge comes amid claims of Mafia bribing politicians

  EUROPEAN CENTRAL BANK

Europe’s guardians of monetary orthodoxy need not fear the printing press – FT

Reza Moghadam: The case for quantitative easing is compelling but it requires broad support.

ECB numbers game – Reuters

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 QE – WSJ

ECB's loans offer clues in quantitative easing guessing game – Reuters

Crunch loan offer may hold key to next ECB policy move – Reuters

Longer Term Refinancing Op.-Allotment – ECB

ECB’s liquidity auction falls short of expectations – FT

ECB: This easing not pleasing – Nordea

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 TLTRO – Danske Bank

Not enough to reach the ECB's balance sheet target

Second ECB TLTRO Also Flops, Bank Take-Up Far Less Than Expected – ZH

ECB Case for QE Boosted by Muted Long-Term Loan Take-Up – BB

Thanks but no thanks – The 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 TLTRO – FT

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 First – Project 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 2014 – ECB

  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 Yellen – Krugman / 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 mistake – The Economist

While job growth in America is hustling along, inflation remains well below the Fed's target rate.

Challenging the Fed – Tim 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 oil – BB

  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 US – Danske Bank

ASIA

Japan bears bet on Abe victory followed by yen disaster – CNBC

OTHER

Daily Central Banks – WSJ

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 Macro – WSJ

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 Daily – Danske Bank

Nordea Morning – Nordea

FI Eye-Opener: Still going downhill – Nordea

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 Stabilize – Marc to Market

US Open – ZH

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

Daily Shot – TradingFloor

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

FX Update – TradingFloor

TLTRO auction results, Norges Bank and SNB dead ahead

G-20 Economic Growth Picked Up in Third Quarter – WSJ

ECB vs Fed stimulus in two charts – FT

FINNISH

Aamukatsaus – Nordea

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

Euro ja talous 5/2014: Talouden näkymät – Suomen Pankki

Kuukausikatsaus joulukuu 2014 – Suomen Pankki

Pitkän aikavälin talousnäkymistä ja politiikkatoimista – Suomen Pankki

Suomen Pankilta synkkä ennuste Suomelle: Historiallisesti poikkeuksellista – MTV

”Historiallisesti poikkeuksellista” – Suomen Pankin mukaan maan talouden lähivuosien näkymät ovat heikentyneet edelleen.

Suomen Pankki: Talouden elpyminen käynnistyy vaivoin – YLE

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 talouskasvu – Hannu 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 tulossa – Risto Pennanen / TalSa

Suomen pirstoutuminen ja talouskasvun hiipuminen lisäävät vastakkainasetteluita väistämättä.

Korkman: Olemme syvällä suossa – TalSa

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

Kreikan tie voi viedä kohti euron takaovea – HS