13th Jan - More Greece & ECB

Previously on MoreLiver’s:

Waiting for Greece and ECB

W/E: Linkfest

W/E: Weekly Support

Friday: Strong US jobs, ECB doubted

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EUROPE

Euro-area outlook for 2015: short-term weakness fades – Danske Bank

 

Six reasons why we should not invest too much hope in lower oil prices – Bruegel

Even if the oil price continues to hover around $50, it is unlikely to add more than one percentage point of growth to the EU economy. Given all mitigating factors, the effect is likely to be even less.

Electing the new Italian President: No Greek drama, but a test for Renzi – Open Europe

Italian President Giorgio Napolitano is widely expected to resign tomorrow, and the Italian parliament will soon have to choose his successor. The election of the new Italian President should involve less drama than in Greece, but some uncertainty remains.

  GREECE

Tsipras Says ’Fiscal Waterboarding’ Holding Greece Back – BB

Tsipras said the notion that Greece’s economy has stabilized is an “arbitrary distortion of the facts.”

Greece Could Exit the Euro by Accident, Warns Hardouvelis – BB

The Politics Behind the ECB's Threat to Cut Greece Funding – BB

Banks Prepare For Grexit But The Real Danger To The Euro Is That It Would Work – Forbes

Challenges confront Germany’s Merkel on all sides – FT

Dogged management by the German chancellor has not brought growth needed in the eurozone

  EUROPEAN CENTRAL BANK

ECB Should Address Low Inflation Sooner, Not Later, Nowotny Says – WSJ

 

ECB May Make Decision on Bond Buying in January — Coeuré – WSJ

 

ECB preview: Whatever can be agreed on – Nordea

Time has come, in our view, for the ECB to announce sovereign QE at the upcoming policy meeting on 22 January. The Greek election three days later will be no obstacle. We expect the ECB to start buying EUR denominated government bonds in Q1, according to the capital key, along the curve, including inflation linkers. In our baseline scenario of a credible programme, we would expect core yields to rebound higher, following initial volatility.

Sovereign QE and national central banks – Bruegel

Leaving national central banks to carry the default risk is impossible and dangerous

  MACRO NUMBERS

UK inflation falls to lowest in 15 years – FT

CPI inflation was 0.5% y/y in December - lowest since May 2000 – Danske Bank

  

REGULARS

Daily Central Banks – WSJ

Douglas’s Take: Lowflation Arrives in the U.K. * U.K. Inflation Slumps in December * Fed’s Lockhart Looks to Summertime for First Fed Rate Increase * Investors Shift Bets on Fed Rate IncreaseInvestors Shift Bets on Fed Rate Increase * ECB Should Address Low Inflation Sooner, Not Later, Nowotny Says

Daily Macro – WSJ

The big policy question now is whether oil importer central banks ignore the temporary disinflationary effects of falling commodity prices or they start to worry about economies slipping into a self-perpetuating deflationary cycle.

Danske Daily – Danske Bank

FI Eye-Opener – Nordea

Lower Swedish inflation puts pressure on the Riksbank * Portugal to test the market with a 30-year bond * SEK and NOK still under pressure

Oil Continues to Slide, Blowing Deflationary Winds – Marc to Market

Daily Shot – TradingFloor

As WTI futures approach $45 per barrel, the damage to producer nations is becoming increasingly pronounced. Venezuela’s debt is trading at deep distressed levels, as restructuring approaches. Conditions are worsening for Russia as well: inflation has spiked after the currency collapse and government bonds are under pressure again as capital flight continues.

US Open – ZH

Futures Rebound, Ignore Continuing Crude Crash, 10Y Under 1.9%, 30Y Near Record Low

FX Update – TradingFloor

Futures Rebound, Ignore Continuing Crude Crash, 10Y Under 1.9%, 30Y Near Record Low

From the floor – TradingFloor

The big story from the floor continues to be the commodities crash: WTI oil has breached $45, iron and copper sit at five-year lows and there appear to be altogether too many soybeans in existence as well. This places pressure on bond yields, currencies and other markers

OTHER

The 8 FX trades for 2015 – Nordea

Bet on the NOKSEK to reverse, the GBP to lose against SEK and AUD to gain. We also have a few relative value EM trades.

Great Graphic: Keep the Dollar Rally In Perspective – Marc to Market

It is true on a bilateral basis the dollar is at multi-year highs.  That is important for individual exposures.    But to understand the impact on the US economy or on policy, nominal bilateral exchange rates are not sufficient.

FINNISH

Aamukatsaus – Nordea

Riksbankin inflaatioennuste mätänee | Tänään inflaatiodataa Ruotsista ja Britanniasta | Kiinan vienti kasvoi odotettua enemmän

Raimo Sailas: Suomen Pankki evästää eduskuntaan pyrkiviä – HS

Raimo Sailas: Edessä poikkeuksellisen työläs menojen karsinta – Verkkouutiset

Urpilainen ja Korkman: Finanssipolitiikan kiristämistä ei pidä lykätä – Verkkouutiset

Entinen valtiovarainministeri Jutta Urpilainen ja professori Sixten Korkman ovat sitä mieltä, ettei finanssipolitiikan kiristystoimia pidä lykätä tuleville vuosille.

Rakenteellinen työttömyys ei olekaan kasvanut – Verkkouutiset

Talouspolitiikan arviointineuvoston mukaan työttömyyden kasvu on ollut pääasiassa suhdanneluontoista eikä rakenteellista.

Professorit: Ruuan verotusta kannattaisi nostaa – TalSa

Neuvosto perää uskottavaa sopeutusohjelmaa – TalSa

Seuraavan hallituksen keskeinen tehtävä on uskottavan julkisen talouden sopeuttamisohjelman laatiminen. Tätä mieltä on viidestä professorista koostuva talouspolitiikkaa arvioiva neuvosto.

Ostovoiman lasku jatkuu - kasvu edellyttäisi kilpailukyvyn parantamista – Verkkouutiset

Ostovoiman kestävä kasvu edellyttää Suomen talouden kilpailukyvyn parantamista, sanotaan tulo- ja kustannuskehityksen selvitystoimikunnan (tuposeto) raportissa.

VATT epäilee kuntatalouden menojen kasvavan – Verkkouutiset

Muutama kommentti Jungerille yrittämisestä – Pörrö Sahlberg

Yhteisvaluutta tarvitsee alueellisia tulonsiirtoja? – Osmo Soininvaara

Jos joidenkin maiden tyhjenemistä asukkaista pidetään pahana asiana, oma valuutta ja kelluvat valuuttakurssit toimivat kohtuullisen hyvin, mutta niihin liittyy omat, talouden tehokkuutta heikentävät ongelmansa.

SAK:n nurinkurinen deflaationäkemys – Roger Wessman

Euroalue on vihdoin deflaatiossa – mitä se tarkoittaa? – HS

Rahaliiton deflaatio on seurausta öljyn halpenemisesta, joten sitä on turha säikähtää. Deflaatio tai hyvin heikko inflaatiovauhti kertovat kuitenkin talouden pitkäkestoisista ongelmista. Se on Euroopalle erittäin vakava asia.

Kreikka lähtee eurosta? ”Arviot kuin Esson baarista – tulella leikkimistä” – SK

Velat tulisi alaskirjata, sanoo rahoituksen professori Vesa Puttonen