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Wednesday, January 21

21st Jan - ECB rumours and leaks

Previously on MoreLiver’s:

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The Alternative Davos Agenda: Greek Elections and Eurozone WoesWSJ
ECB Meeting and Greek Elections Are Likely to Dominate at World Economic Forum

George Friedman: Nationalism and the Crisis of EuropeEconmatters

Italy PM Renzi: ‘My Dream Is Parity’ Between Euro and DollarWSJ
Europe Needs Flexibility to Fuel Economic Growth, Renzi Says

Juncker's Plan - Last Chance to Revive Europeeuinside

Sweden: thoughts on unconventional policy measuresNordea
Growing expectations on further QE measures from ECB and SNBs surprise rate cut has increased expectations on Riksbank adding more stimulus as well. The market is currently expecting a negative repo rate at around -0.08 % over the coming six months.

Don’t Take Away Our FX Peg Is Plea From Denmark’s ExecutivesBB

Guest post: Was the Swiss National Bank nuts?FT
Peter Doyle, economist and former IMF staffer, argues that the SNB in fact kept its exchange-rate cap for too long — and was wrong to have targeted the euro alone.

The three big misconceptions about the Swiss francThe Economist
The cap on the franc was unsustainable * SNB needed to worry about big losses on its euro holdings * The cap was protectionist

  EUROPEAN CENTRAL BANK (see also ECB Preview Special)
What the history of the Bundesbank might teach the ECBFT

5 Things to Look for in Eurozone QEWSJ

The ECB’s bond-purchase dilemmaBruegel
The fact that the ECB did not share losses in the previous round of Greek debt restructuring highlights the problem of sovereign QE, which is not feasible or will be ineffective if fiscal implications are excluded. The design of the programme is therefore crucial.

Paul De Grauwe: The sad consequences of the fear of QEThe Economist
Two reasons why the case for QE is overwhelming: QE is merely a correction for what happened during the last two years. The euro-zone economy is not getting off the ground.

The ECB’s bond-purchase dilemmaBruegel
German opposition to government-bond purchases by the EC is solidifying ahead of the programme’s likely announcement

Central bank prophet fears QE warfare pushing financial system out of control The Telegraph
Former BIS chief economist warns that QE in Europe is doomed to failure and may draw the region into deeper difficulties: “QE is not going to help at all. Europe has far greater reliance than the US on small and medium-sized companies (SMEs) and they get their money from banks, not from the bond market.”

ECB's QE leaked: monthly €50 bn bond monetizationZH

ECB Preview: FAQMarc to Market

How Good Would QE Be for European Equities?WSJ
U.S. and Japanese precedent suggest quite a lot. But there are good reasons to be cautious.

ECB QE. Much too late and not to be counted onTony Yates
The best that is to be said for EZ QE is that will probably do no harm, and is worth a shot. 

Watch Europe Fumble QEView / BB
Perhaps it's worth going through with the QE exercise: Until policymakers see its futility, they won't lift their gaze, as King suggests, to consider deep structural reforms, which are much tougher to carry out than government bond purchases.

As Size of ECB’s Potential Bond Buying Emerges, What Does the Street Think?WSJ

ECB’s QE Plan a Cross Between the Fed’s QE2, QE3 – HilsenrathWSJ

Eurozone QE: ‘Like Penalty Shoot-Outs at a World Cup’ — RBSWSJ

Markets Spring into Action as News Breaks on Potential Size of QEWSJ

30Y Treasury Yield Tumbles To Record LowZH
US Treasury 30Y yields have just broken to a new record low 2.3500% handle. The yield curve (2s30s) has cracked lower to its flattest since 2008.

BOJ on hold despite marked downward revision of inflation forecastDanske Bank
BoJ is unlikely to ease on the back of the decline in headline inflation we are likely to see in the coming months. It can live with a temporary decline as long as the economy continues to recover and inflation expectations do not decline substantially.

BoJ: inflation forecast cut gives room for more easingNordea
After its meeting today the BoJ left the asset purchasing programme unchanged and instead extended the loan scheme. Most interestingly the inflation forecast was lowered significantly, which may be interpreted as the first step paving the way for more easing in the future. The risk of another QQE expansion is realistic, especially given the prospect of more dovish BoJ this year.

Goldman Warns Bank Of Japan "At Risk Of Losing Credibility"ZH

Daily Central BanksWSJ
Hilsenrath’s Take: Japan’s Cautionary Tale as Fed Contemplates Rate Increases * Fed’s Powell Says Rate-Rigging Undermines Trust in Banking * Don’t Get ‘Overexcited’ About ECB Meeting, Says Nowotny * BOJ Cuts Price Forecast, Stands Pat on Policy * BOE Hawks Drop Call for Higher Rates

Daily MacroWSJ
All eyes are on the ECB meeting on Thursday. Expectations are that the ECB will launch a substantial program of sovereign bond purchases, or quantitative easing…After last week’s shock Swiss move, no one wants to be caught out by any ECB surprises. Elsewhere, the story Wednesday is once again one of disinflation making a mess of monetary policy makers’ options and the fallout that comes from that.

Danske DailyDanske Bank

Eye-Opener: Rising loan demand, rate cuts and hikes, stronger GBPNordea
Has the BoE turned more dovish with the drop in oil prices? * Huge Spanish bond issue illustrates the demand still there * Wage growth to support GBP

Central Banks Dominate FX Price ActionMarc to Market

Futures Lower After BOJ Disappoints, ECB's Nowotny Warns "Not To Get Overexcited"; China Soars

FX UpdateTradingFloor
The Bank of Japan lowers its inflation forecast and JPY rallies while New Zealand inflation pulls the rug out from under NZD. Today, the UK employment and earnings data and BoE minutes, as well as the Bank of Canada are the chief sideshows ahead of an ECB meeting for the ages tomorrow.

From the floorTradingFloor
Tomorrow's ECB meeting gives us much to chew on – and the extent the ECB compromises on the risk sharing of its quantitative easing programme is key.

Martin Wolf: Chronic economic and political ills defy easy cureFT
Deficient demand, stagnant productivity, fragile finance, unstable politics, tense geopolitics, challenge overload. These conditions are chronic, not critical. They cannot be cured quickly or easily. They can, however, be managed.

Recap 2015-01-20: CB credibility, BAML FMSGlobal Macro Trading
Fund Managers' Current Asset Allocation – JanuaryThe Fat Pitch
Globally, managers are not just overweight equity and underweight bonds, they are overweight the highest beta equities (technology, discretionary, banks) and underweight defensives (telecom, staples). The largest underweight is energy.

Live blog: Davos day oneFT

Canada cutsFT

Suomen työvoiman kasvu ei uskottavaa | Tuleeko Britannian keskuspankki varovaisemmaksi? | ZEW odotuksia parempi joulukuussa

Talouspolitiikan arviointineuvoston raporttiAkateeminen talousblogi

PS: Teollisuuspolitiikaan täyskäännös, kohonnutta poliittista maariskiä vähennettäväPS

Verkkouutisten kysely: Suomen paikka on lännessäVerkkouutiset

Populismi - syy vaiko seuraus annetusta tilasta?Henri Myllyniemi / US