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Tuesday, January 6

6th Jan - Another day of minor panic

Previously on MoreLiver’s:

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The convergence dream 25 years on Bruegel
Half of the former communist countries did not converge to advanced EU countries from 1989-2014

Germany Does Care About a Greek Exit – View / BB
Why Grexit would not help Greece - debunking the myth of exports – Bruegel
Greek Bonds Tumble As Report Sees "Decisive Victory" For Syriza – ZH

Markets position themselves ahead of ECB meetingTradingFloor
Traders are loading up on government bonds before the ECB's announcement on January 22, which is expected to include details of an aggressive quantitative easing program. But this strategy has not been confirmed and the ECB has other options for increasing the monetary base.

Sliding prices, falling euro, tumbling yields pressure ECB to act TradingFloor
German consumer prices are close to stagnating. This fuels the belief that Eurozone inflation is embracing widespread deflation. It also negates all Bundesbank arguments and adds weight to the case for ECB stimulus.

David Marsh: the ECB plays wait-and-seeMarketWatch
Whatever happens, as the campaign for the Greek election picks up steam, tussling over blame and responsibility for the euro malaise will rise. In this highly charged atmosphere, the ECB will wish to remain as neutral as possible.

ECB considering three approaches to QE: Dutch paperReuters
1) ECB itself buys bonds based on capital key 2) ECB buys only AAA-bonds c) national central banks buy bonds based on capital key

Euro-Area Economy Menaced by Threat of Relapse – BB
U.K. Services Growth Is Least in 19 Months – BB

Labour market: downside risk to December payrolls – Danske Bank
ISM non-manufacturing declines more than expected in December – TradingFloor
December Jobs "Significantly Below 200,000", Q4 GDP Tumbles To 2%, Markit Warns – ZH
US Factory Orders Drop Most YoY In 19 Months – ZH
Service Industries Help Put U.S. Expansion on Even Keel – Reuters
ISM Non-Manufacturing Index decreased to 56.2% in December – Calculated Risk
Service ISM Tumbles To Lowest Since June – ZH
ISM Services a Big Downer – Bespoke


Daily Central BanksWSJ
Hilsenrath’s Take: Greek Exit Worries and ECB Bond Purchases Take Center Stage * San Francisco Fed’s Williams Sees no ‘Rush’ to Tighten Monetary Policy * IG to Play Starring Role in Review of Fed * White House Expected to Nominate Community Banker To Fed Board * Brinkmanship Returns to the Eurozone

Daily MacroWSJ
As Oil Slumps, Systemic Risks Trump Cost Benefits in Investors’ Minds

Danske DailyDanske Bank

Eye-Opener Nordea
German inflation close to freezing point * Liquidity pricing strongly suggests QE soon * EURUSD to retest 1.20

Oil Continues to Plunge, Equities Slip, Yen Rises Marc to Market

Euro-Dollar Exaggerates Euro's DeclineMarc to Market

Daily ShotTradingFloor
The great oil slide ain't stopped yet * Iraq and Russia pump up production * BoJ's balance sheet is a whopper

The Crunch Continues: WTI Tumbles Under $49, 10Y Dips Below 2%

From the floorTradingFloor
JPY rides risk-off sentiment on back of Grexit fears, lower oil price * USD facing "pivotal day" ahead of US ISM, says Hardy * Greek fears overdone with some equities beginning to look enticing, says Garnry * Shale sector distress on the rise as oil price drift continues, says Hansen * Three-week 140 strike on EURJPY highlighted as vols trading higher * Perky AUD pulls NZD higher as China stimulus and HSBC PMI supports

The fiscal theory of monetary expansion Frances Coppola
Faux monetary expansion by central banks is no substitute for the real expansion caused by government deficit spending via commercial banks. So when the economy is on the floor, monetary conditions are tight and banks not lending to the private sector, unchain the fiscal authority - and stop worrying about deficits.

Sovereign debt projection toolFT

Vakaus luo epävakautta – Minsky-hetki ja uusi talouskriisi ovat luultavasti jo lähellä HS

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