W/E: Weekly Support (updated)
Follow ‘MoreLiver’ on Twitter
EUROPE
While size
can be important, it is the resilience of the banking system that is key for
financial stability.
Eurogroup
Statement on the Draft Budgetary Plans 2015 – EU
SNB Threatening
Negative Rate Awaits Draghi’s Next Move – BB
Policy
makers at the Swiss central bank have pledged numerous times to “immediately”
supplement their three-year-old cap if needed, with options including a charge
on sight deposits.
Central
banking is really hard and that the Riksbank’s actions are just as defencible —
or indefencible — as those of most other rich world central banks.
France’s finance minister: criticising France’s economic policies fuelling the
rise of anti-EU populists.
Arguments
for and against EU enlargement – Debating
Europe
Eurozone
Needs Further Labor Market Reforms, Says IMF – WSJ
GREECE
Greek
premier calls snap presidential election – FT
Greek
Markets Tumble as Samaras Risks Early Elections – BB
Greek and
peripheral bond yields snap higher – TradingFloor
Greece is back to cause market tremors.
The country risks falling back into political vacuum, which could once again
raise questions about the country’s future in the single currency. Greece still has the potential to cause
uncertainty far beyond its own borders, meaning volatility is set to pick up,
as year-end approaches.
What’s
“catch a falling knife” in Greek? – FT
A snap
presidential election — and the chances of Syriza coming into power if the
government fails to win enough support to push its candidate through — are all
it took to push the ASE down over 10 per cent on Tuesday.
Will
Greek Political Instability Renew Existential Doubts about EMU? – Marc
to Market
As
difficult as it is for Greece inside EMU, it would be worse to drop out. Dropping out of EMU appears to be a pre-condition
for, and necessitate, default.
OTHER CRISIS COUNTRIES
Which
euro area countries have been driving household spending growth? – FT
Notice the
turnarounds in Spain, Italy, and other countries on the so-called “periphery”
Spanish
house prices continued their climb in Q3 – TradingFloor
Russia
Bond Yields Surge to 5-Year High as Rate Pressure Mounts – BB
The
Russian Economy Is Heading toward Disaster – PIIE
President
Vladimir Putin’s annual address to the Russian Federal Assembly in the Kremlin
on December 4 occurred in the midst of a perfect financial storm, which he
largely ignored. His unspoken main message was that no economic reforms would
take place. But the speech might have been his last opportunity to use reforms
to save his regime from the financial turmoil that has just started.
EUROPEAN CENTRAL BANK
Banks to
only take 130 billion euros at second ECB TLTRO: traders – Reuters
The ECB
and QE in the Last Chance Saloon – George
Magnus
ECB
blamed for covered bond shortage – FT
Covered
bond supply has reached its lowest level in nearly two decades as the ECB has
been accused of crowding out investors from the market by pushing up prices and
depressing yields.
European
Central Bank loan auction set to miss target – FT
Analysts
expect banks to take €170bn of a possible €317bn
ECB
considering tighter rules for emergency funding – Reuters
"The
European bail-in tool decreases the predictability of state support," said
S&P managing director Stefan Best in a separate presentation on banking
prospects.
Peter
Praet: Current issues in monetary policy – ECB
UNITED STATES
Fed
‘Considerable Time’ Rate Pledge Under Scrutiny Ahead of FOMC – BB
Fed
Updates Ahead of FOMC Meeting – Tim
Duy’s Fed Watch
Fed is
still positioning to begin normalizing rates in the middle of 2015. The data is
less of an impediment with each passing day. The time to eliminate the
"considerable period" language is fast approach. The press conference
calendar argues for next week. Honestly, I hope they will skip this meeting in
favor of the January meeting just to prove that every FOMC meeting is a live
meeting. Alas, I think they believe they need the press conference to temper
any adverse reactions from market participants.
Fed has considerable trouble
updating guidance on interest rates – FT
A number of
officials think “considerable time” is still doing useful work, as it signals
rates are unlikely to go up at the next meeting or two. Others dislike
referring to any fixed period of time.
ASIA
The stock
boom comes as Chinese industry battles with massive overcapacity in everything
from steel to shipbuilding, coal output, cement and solar panels
Chinese
leaders are meeting this week to determine the policy blueprint for the economy
in 2015. Covert fiscal spending and monetary easing are almost certain to
continue under the guise of “flexibility”. A new tilt towards regional
investment, a tougher stance on environmental protection, and fewer
restrictions on overseas investment in financial markets are also on the cards.
PBOC Tightens FX & Slashes Collateral Availability; Yuan Crashes Most
Since 2008 – ZH
China bond yields spike after corporate
debt market crackdown – Reuters
Lack of
enthusiasm for Abenomics aside, there is even less appetite to abandon it
halfway through
Australian
Business Confidence at 16-Month Low as Rate Cuts Seen – BB
OTHER
Daily
Central Banks – WSJ
Hilsenrath’s
Take: Here’s How to Read A Patient Fed * As Fed Gets Set to Meet, “Considerable
Time” Takes Focus * Fed’s Lockhart Still Favors Mid-2015 for First Fed Rate
Increase * Mid-2015 Liftoff Still ‘Reasonable Guess,’ Fed’s Williams Says * China
Markets Plummet
Daily
Macro – WSJ
In China,
where years of overleveraged investment is now being tested by a slowing
economy, a shift in collateral policy by an official clearinghouse organization
prompted the biggest decline in Chinese shares for six years and a
record-breaking plunge in the yuan. In Greece, political uncertainty is roiling
markets and spilling over into the rest of the eurozone. Once again, this small
eurozone economy is poised to put the monetary union to the test. Into this
environment, the Federal Resrerve is preparing to signal next week its
progression toward an increase in interest rates.
Danske
Daily – Danske
Bank
Nordea
Morning – Nordea
Moody’s
affirms Swedish Aaa rating with stable outlook * Fed may drop “considerable
time” phrase
FI
Eye-Opener: Long live the bulls – Nordea
Bond yields
with sizable falls again – bonds to remain supported. Intra-Euro-area spreads
widen – more volatility ahead. Oil prices still in free fall. Equities retreat.
Nowotny boosting QE hopes. Greek uncertainty adding to volatility before
year-end. UK industrial production and US small business optimism. US and
Austrian issuance.
A Day of
Reversals – Marc to
Market
US Open – ZH
It Wasn't
Only China: Here Is What Else Is Crashing Overnight
Daily
Shot: Energy is the new sub-prime – TradingFloor
Energy
funds becoming "toxic assets" * Australian dollar in free-fall * Equity
investors turning to retail shares
Volatility
in China equities is offering an increasingly
attractive environment for traders even if the Shanghai Composite came off by
5% overnight. Meanwhile, the USDJPY uptrend is correcting, and today could be a
headache for Tesco.
Global
Central Bank Focus: The Great Escape – PIMCO
Over the
longer term, portfolios should be positioned for low policy rates not only in
the U.S., but also in Europe and Japan.
Follow
the Swiss for reserve management success – FT
Carefully
controlled diversification of central bank assets makes sense
Central
Bank Balance Sheets
– Marc
to Market
Does the
expansion of a central bank's balance sheet let us forecast currency
movement? It is not immediately
clear. It depends on where one begins
the story.
What the
Strengthening Dollar Means for Emerging Markets – WSJ
FINNISH
Aamukatsaus – Nordea
Kiinan kasvu hyytyy, mutta pörssi kuumenee * Saksan
teollisuustuotanto vaisua * Kreikan presidentinvaaleja aikaistettiin
Raimo Sailas: Euroopan näivetystauti näyttää pitkittyvän –
HS
Joka neljäs suomalainen haluaa markan takaisin – IL
Koskenkylä: euroalue ei ole toimiva, se oli suuri virhe. Nyt
sen myöntää yllättävän moni.
Suomalaispankeille miljardin lasku kriisirahastosta –
KL
Valtioneuvoston arvion mukaan Nordea maksaisi rahastoon
seuraavan yhdeksän vuoden aikana 450-850 miljoonaa euroa. Todennäköisimmin
summa olisi haarukan yläpäästä.
Euroopan vakausmekanismi voi alkaa rahoittaa pankkeja
– HS
Ensiasunnon ostajien määrä vähentynyt vuodesta 2006 lähes
40 prosenttia – TE
Duunarin etu on oma valuutta – Kaj
Turunen / US
Visiota Suomen EU ja eurojäsenyydestä – Sirpa
Abdallah / US
Ruotsin ja Suomen vaalikevät – Jussi
Halla-aho
EK: Rohkeat säästöt ja palkkaverojen reipas alentaminen
– Verkkouutiset
Mamutaustaisten nuorten turvallisuuskokemukset
Helsingissä – HEL
Nuoret maahanmuuttajanaiset kokevat olonsa Helsingissä muita
turvattomammiksi – YLE
Yle uutisoi vajavaisesti maahanmuuttajanuorten peloista
– Professorin
ajatuksia