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Friday, January 30

30th Jan - EZ deeper into deflation, mediocre US GDP



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EUROPE
Secular stagnation in the EurozoneVoxEU
Paul De Grauwe: Southern counties had accumulated current-account deficits and became debtors when the Crisis hit, whereas the northern ones became creditors. The burden of the adjustments has been borne almost exclusively by the debtor countries creating a deflationary bias. Suggested fiscal policy prescriptions are government investment programmes, to be implemented by northern countries (and in particular, Germany).

Deep Dive: Is EMU Irreversible or Not?Marc to Market

Is the DKK the new CHF?FT

30Y German Bund Yield Plunges Under 1% - Record LowZH

  RUSSIA
EU Moves Toward Tougher Russia Sanctions as Greece Yields – BB
Russia's central bank goes dovish – Danske Bank
Bank Of Russia Surprises With Unexpected Rate Cut – ZH
Russian central bank makes surprise interest rate cut – Reuters

  GREECE
The troika saved banks and creditors – not Greece – Open Democracy
No, Greece does not 'need' a haircut – TradingFloor
Germany: Greek aid extension only makes sense if Athens upholds reforms – Reuters
Greece Shuns EU Bailout Cash Before Dijsselbloem Visit – BB
Greece really might leave the euroWaPo

  EUROPEAN CENTRAL BANK
The Euro-area loan developments are at a turning pointNordea
Both the bank lending survey and the euro area monetary indicators tell the same story: Credit conditions are improving and lending is beginning to pick up in the Euro area. The QE program will boost lending additionally beginning in March.

Draghi’s Asset-Backed Debt Revival Nowhere to Be Seen in JanuaryBB
Sales of the notes totaled 1.2 billion euros ($1.4 billion) in January, the least for any month since August 2011

  MACRO NUMBERS
Euro area annual inflation down to -0.6% - EC
Euro zone prices fall at record-equalling pace in January – Reuters
Euro inflation weakens furtherDanske Bank
Is the Eurozone Spiraling Into Deflation? – The Short Answer – WSJ
Eurozone Deflation Ties Post-Lehman Record, Worse Than Expected – ZH
Eurozone deflation: where does this leave quantitative easing? – The Guardian


Eurozone Consumer Prices Fell Sharply in January – WSJ


Italian unemployment drops sharply in December – TradingFloor

UNITED STATES
Are widening U.S. credit spreads warning of a peak in U.S. equities?Thomson Reuters

  Q4 GDP
Q4 and Annual 2014 GDP (Advance Estimate) – BEA
U.S. growth cools in fourth quarter, but consumer spending robust – Reuters
At A Glance: U.S. Fourth-Quarter GDPWSJ
US economy grew at 2.6 percent last quarter, below expectations – Vox
Q4 Annualized GDP Misses, Tumbles To 2.6% From 5.0% - ZH
Economy in U.S. Expanded Less Than Forecast in Fourth Quarter – BB
U.S. Economy Grew at 2.4% Rate in 2014, Best Since 2010 – NYT
BEA: Real GDP increased at 2.6% Annualized Rate in Q4 – Calculated Risk
U.S. economy grew at 2.6 percent pace in fourth quarter of 2014 – WaPo
US GDP rose 2.6% in Q4 driven by private consumption – TradingFloor

ASIA
Japan: downward pressure on inflation, but growth recoveringDanske Bank

Australian Equities Are OversoldShort Side of Long

REGULARS
Daily Central BanksWSJ
Hilsenrath’s Take: On an Important Data Day for the Fed, Look Out for Wages * Yellen Tells Senate Democrats U.S. Economy is Strong * Rosengren Says Fed Has Big Role to Play in Cybersecurity * Russia Cuts Interest Rates * Eurozone Consumer Prices Fell Sharply in January

Daily MacroWSJ
Falling eurozone prices – don’t call it deflation says the European Central Bank – remain a big worry for economists. Will they take hold and feed a pernicious vicious economic cycle that the single-currency region can’t escape? Even a relatively robust Germany, where unemployment is lower than it’s been in at least a quarter of a century, faces falling prices. On the other hand, Spain shows falling prices don’t need to be incompatible with growth.

Danske DailyDanske Bank

Eye-OpenerNordea
Greek markets rebound German inflation plunges, pushing inflation expectations further down * Today’s ECI could be decisive for the Fed, and thus important for markets
 – Marc to Market

Daily ShotTradingFloor
ECB QE decision gets vindication from negative German CPI print * Green shoots of recovery start to sprout in Eurozone * Ruble weakness emerging again as Central Bank of Russia meeting looms

US OpenZH
Treasury-Equity Reallocation Trade Pushes Futures Lower, 10 Year Rises To 1.72%

Deflationary Forces StrengthenMarc to Market

From the floorTradingFloor
Japan CPI print shows strong disinflationary trend * Chinese currency woes could see PBoC make a statement * US GDP report expected to signal a full recovery from the recession * Raw materials tumble down to a 12.5 year low * Translation error sends Belarussian bond yields soaring

OTHER
Global: the USD liquidity elephant in the roomNordea
Why is it that, every time the Fed stops its money-printing programs, or initiates the end of such programs (the tapering process), global nominal activity eases, inflation expectations drop, the USD appreciates, volatility rises and long-term bond yields plummets? Could it be that the world is more dependent on abundant USD liquidity than commonly thought?

FINNISH
AamukatsausNordea
Myös Saksa päätyi pakkaskerhoon | USA:n työmarkkinoiden kustannusindeksi | Tanskan keskuspankki laski jälleen talletuskorkoa

Yksittäisistä maista suurin syyllinen eurokriisiin on – Saksa Tyhmyri

Ilmarinen: "Emme pääse Euroopan vauhtiin"YLE
Työeläkeyhtiö Ilmarisessa ollaan huolissaan Suomen taloustilanteesta. Sijoittajille Ilmarinen ennustaa hankalaa vuotta rajusti vaihtelevien osakekurssien ja matalien korkojen takia.

Suomi: Asuntojen alennusmyynti loppuu pian Nordea
Asuntojen jokavuotinen alennusmyynti on pian taas ohi. Hinnat ovat joulu- ja tammikuussa keskimäärin jopa pari prosenttia eli varainsiirtoveron verran matalammat kuin kesällä.

PS:n ajatuspaja lyttää EVA:n kaavailut maahanmuuton tuplaamisesta – PS

Suurten yritysten liikevaihto jouluk. -0,9% YoY – Tilastokeskus
Bruttokansantuote supistui 1,3 prosenttia vuonna 2013 – Tilastokeskus