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Monday, January 26

26th Jan - Syriza wins in Greece, debt talks ahead

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The lesson from Greece: A 1930s-style depression creates 1930s-style politicsWaPo
Matt O’Brien: Austerity, in other words, isn't what Europe deserves blame for in Greece. Hard money is. Or, if you want to go all the way back, creating the euro in the first place when textbook economics said a crisis like this was inevitable if they did

What To Do with the Extreme Wrongs?euinside
The political elites initially addressed with contempt and condescension the "sprouts of democracy" and now, when they are a real political force, which threatens not only their own seats but the EU as a project, the lack of an adequate answer is impressive.

The return of the German questionEuropp / LSE
Why conflict between creditor and debtor states is now the defining feature of European politics

European Regulators Pressure Big Banks to Increase CapitalWSJ
Banks Encouraged to Raise Capital Well Above Formal Regulatory Limits


Russia Faces Mounting Pressure Over Rising Ukraine Violence – BB
S&P downgrades Russia's sovereign credit rating to 'junk' – Reuters
Russia Credit Rating Cut to Junk by S&P First Time in Decade – BB

Steen Jakobsen on Greek election: It's really up to the ECB and EU now – TradingFloor
Stephen Pope: Giving the Hellenic Republic the heave-ho – TradingFloor
Why Europe should celebrate Syriza's victory – Sony Kapoor
Syriza win issues challenge to EuropeFT
Juhani Huopainen: Anti-austerity Syriza wins - debt talks ahead! – TradingFloor

Steen Jakobsen: Syriza's Greek victory – the market responds – TradingFloor
Introducing Yanis Varoufakis – Econospeak
Greece: Unstoppable force meeting an immovable object – Nordea
George Magnus: Who will blink now Syriza has won? – FT
Greece’s debt pile: is it really unsustainable? – FT

The Greek Stand-By Arrangement – Krugman / NYT
Anti-austerity Syriza wins election – BBC
Greek leftist leader Tsipras claims victory over austerity – Reuters
Syriza Rides Anti-Austerity Wave to Decisive Victory in Greece – BB
Greece Syriza Win Puts Question Mark on Europe Stocks After Jump – BB

Euro Slips With Asian Equities on Greek Vote; Crude Sinks – BB
El-Erian: What Syriza's Sweep Means for Greece and EuropeView / BB
Tsipras to form anti-bailout Greek government after big victory – Reuters
IMF's Lagarde rules out special treatment for GreeceReuters
Greek austerity after Syriza – FT

You can't always get what you want – The Economist
Internal Devaluation in Greece: immensely costly, but has been paid – Krugman / NYT
Those Radical VSPs: Syriza is more mainstream than BrusselsKrugman / NYT
Is Greek government debt really 177% of GDP? – FT
Greece's Vote to Keep the Euro – View / BB

Retaking the Greek Test – Bruegel
Greek Growth Drought Is Real Threat to EU – View / BB
Greek election: the reality shock ahead – Berenberg
Germany and ECB rule out debt relief for GreeceFT
Has the Greek Election Changed Anything? – WSJ

Key dates as Syriza seeks debt relief – FT
After Victory, Alexis Tsipras Forms Coalition Government – NYT
After Elections, Country’s Creditors Seek Their Turn – NYT
Ending Greece’s NightmareKrugman / NYT
Greece’s Tsipras faces impossible trilemma – David Marsh / MarketWatch

Greece, the EU and Aunt Agatha – medium
Quicktake: Greece’s Fiscal OdysseyBB

ECB’s last throw unlikely to be a winnerTradingFloor
History suggests the ECB’s new program will not achieve its aim of generating 2% inflation. Trying to generate “cost-push” inflation (a wage-price spiral) via exchange rate depreciation hasn’t worked in a global disinflationary environment.

Draghi Plays Chess in Economy After Journey to Trillion-Euro QEBB

Prices in Europe Continue to Sink, Showing Why Draghi Had to Act BB

Dutch Central Bank Head Says He Doesn’t Support QEWSJ

Great Graphic: Shouldn't the ECB Target Core Inflation?Marc to Market

Ifo Business Climate index continues to rise – CESifo
German IFO hits 6 month high in January – TradingFloor
German Ifo increases in January – Merkelnomics
PMIs up, ZEW expectations up – and now the Ifo as well – Nordea

FOMC Preview: A little more patience Danske Bank
We expect the statement to repeat that the FOMC can ‘be patient in beginning to normalize the stance of monetary policy’. In December Yellen explained patient is consistent with the Fed staying on hold for at least the coming two meetings. This would in effect rule out hikes at the March and April FOMC meetings

Daily Central BanksWSJ
Derby’s Take: Fed Board Quiet In Run Up To Meeting * Fedspeak Cheatsheet: What Are Fed Policy Makers Saying Ahead of Their Meeting? * Euro’s Big Drop Puts U.S. Economy, Fed to the Test * ECB’s Draghi Calls for Deeper Economic Integration of the Eurozone * Bank of England’s Rate Setter Suggests Need for Earlier Rate Rise

Daily MacroWSJ
For Greece, it’ll probably be more of the same, albeit with more antagonistic rhetoric. And for the eurozone general, financial conditions will be dictated by the competing forces of central bank liquidity and lackluster economic growth

Danske DailyDanske Bank

NEW financial forecasts – EUR/USD at parity and Bund yields below 1% * Greece votes strongly for change * Strong bond rally continues

Syriza's Victory is Not the End but the Beginning Marc to Market

Daily ShotTradingFloor
After the Greek election again the Eurozone is in focus. What will the new government bring? Also, we elaborate on why citizens' saving patterns are decisive for the effects of quantitative easing.

Global Risk Rattled By Syriza Surge To Power

FX UpdateTradingFloor
After an overnight spike to 1.1100 in EURUSD, the Euro has stabilised in early European trading after a clear-cut victory for the anti-austerity Syriza party in Greek elections. Are the EURUSD bears overextended ahead of this Wednesday’s FOMC meeting?

From the floorTradingFloor
The big story from the floor today is the Greek election, where the anti-austerity Syriza party have just secured a major victory. According to Saxo Bank head of FX strategy John Hardy, the win gives Athens a great deal of power relative to the European Central Bank and this story will continue to play out over the coming months.

KVP's Macro Take: Risk-on Europe and a move to the Dark SideTradingFloor
Failing a Greek bombshell, only one thing on my mind, Risk-ON in Europe! * Go long euro-zone equities favouring the peripherals * Stay long European credit and maintain the short positions on EURUSD, EURGBP

The Matrix: A strategist’s roving thoughtsTradingFloor
Kay Van-Petersen: Look to play equities in Asia, with a thematic lowering of rates blanketing the region * Long Indonesia credit versus Malaysia credit has macro fundamental merits on a number of grounds * A dovish shift from the FOMC could see a short-term big correction in the USD strength

It’s not the euro that’s getting cheaper; it’s the dollar that’s getting more expensiveFT

EURUSD: cheaper than usual, but for good reasonsNordea
EUR/USD has recently fallen below its long-term average, helped lower by economic and policy divergences. As we expect these divergences to persist, it makes sense for the EUR to cheapen further vs the USD. While valuation will increasingly be of concern; it need not necessarily be an immediate trigger for a stronger EUR. In the year 2000 for instance, EUR/USD dropped to 0.85, which was then 27% below its PPP fair value. The next few months may offer good selling opportunities.

FX: QEphoricNordea
The 1.12 is HUGE for EURUSD. A post-QE bounce this week possible...ditto the rates. Friday's US wage data key. EMs!

Macro Stress Indicators: Energy risk-off vs Equities risk-onTradingFloor

Technocrats know how to fix the economy. And they didWaPo

Kreikka ja USA tämän viikon markkina-ajurit | Vasemmistolainen Syriza-puolue odotetusti vaalivoittaja | Euroalueen ostopäällikköindeksi nousi odotettua enemmän

EU, maahanmuutto ja monikulttuurisuusBrysselin kone / Yle
Europarlamentaarikko Jussi Halla-aho ei kannata euroa, eikä myöskään kannata europarlamentin vallan kasvua, koska se hänen mukaansa siirtää päätösvaltaa pienten maiden kansalaisilta isojen maiden kansalaisille.

Vaikutuksista viis, EKP vahvistaa paukkujaJan Hurri / TalSa
uroalueen keskuspankki EKP aloittaa erittäin mittavat mutta ristiriitaiset valtionlainaostot. Se sanoo ostojen elvyttävän euroalueen taloutta, luotonantoa ja inflaatiota, vaikka nämä ovat epävarmoja tavoitteita tai tekosyitä. Varmat vaikutukset ovat kiusallisempia: EKP:n ostot tukevat eurovaltioiden alijäämien rahoittamista ja finanssivarallisuuden arvonnousua. Yleisö kantaa riskit.

Kriittinen optimistiKL
Vuonna 1994 valtiovarainministeriön korkea virkamies Sixten Korkman vastusti julkisesti Suomen menoa rahaliittoon. Tänään vapaa professori tekee pesäeroa niin euron tuhon ennustajiin kuin Euroopan liittovaltiosta unelmoiviin.

[2009] Väitöskirja: Julkisella mielipiteellä ei ollut merkitystä Poliittinen eliitti valmisteli EMU-päätöksen salaisestiUralehti
Väikkäri löytyy täältä.

EKP:n määrällisen helpottamisen vaikutuksista Raha ja Talous

Näkökulma: Arvotaan seuraava meppiIL

Teollisuuden tuottajahinnat joulukuussa -1,8% YoY – Tilastokeskus
Palvelujen tuottajahinnat loka-joulukuussa +0.8% YoY – Tilastokeskus

Suomen, Saksan ja Kreikan talouksien kohtalonyhteys – Professorin ajatuksia
Kantaako Syrizan uho? – Vesa Varhee / TalSa
"Troikan ja Kreikan on nyt neuvoteltava lupauksista" – TalSa
EKP "ei voi sopia" velkahelpotuksista Kreikalle – TalSa
Syriza ja taloudellinen vääntö – Kreikalla on paremmat kortit uskoisi – Tyhmyri
Voiko, haluaako Kreikka maksaa velkansa? – Sixten Korkman / HS
Halvalla menee, Paavo! – KL
"Perussuomalaiset hyödyntävät Kreikka-korttia" – TalSa
Vanhan vallan kreikkalainen kujanjuoksu – Simon Elo / US
Totuuden hetki lähestyy – Sampo Terho
Etlan Vihriälä: ”Syrizan pitää lieventää vaalilupauksiaan” – IS
Näkökulma: Eurokriittisten äänistä kilpailu keskustan ja perussuomalaisten välillä – YLE