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Monday, January 5

5th Jan - Europe goes deflationary



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EUROPE
Europe’s TrapKrugman / NYT
Europe is at a dead end; if anything, Greece is doing the rest of Europe a favor by sounding a wake-up call.

Inflation vanishesReuters

Wolfgang Münchau: Political extremists may be the eurozone’s savioursFT
The probability of at least one political upset in 2015 is very high indeed

As the Euro Takes a Fresh Dive, Here’s What Strategists ThinkWSJ

The Euro Is Moving In The Right Direction, But It Needs To Fall FurtherAlpha Now

Permanent QE and helicopter moneyBruegel
As the ECB contemplates its own version of quantitative easing, this review clarifies the conditions under which this policy is believed to matter (beyond the portfolio channel) for inflation and growth. Unlike what was done in the US, the associated monetary base growth needs to be permanent. Within this framework, this review also discusses the pros and cons of helicopter money – i.e. overt money-financed deficits – as compared with permanent QE.

Draghi Girds for Risk of Deflation With His Finger on the Bond-Buying ButtonBB

ECB Will Find It Near Impossible to Lift Demand, Summers SaysBB

German Inflation Tumbles To Lowest Since October 2009ZH

Greek Euro Exit Would Hurt Germany, Merkel Parties SayBB

Samaras Faces Greeks Skeptical of His Euro-Exit WarningsBB

UNITED STATES
Charts on US data over the holiday seasonDanske Bank
Consumer-driven growth amid falling inflation

REGULARS
Daily Central BanksWSJ
Hilsenrath’s Take: A More Vibrant U.S. Economy Picking Up Where it Left Off in 2014 * Global Central Banking in 2015, a First Quarter Update for 25 Economies * As Fed Prepares to Raise Rates, Economists Warn of Potential Bumps * Fed Could Raise Rates in First Half of 2015—Mester * Euro Tumbles to Nine-Year Low

Daily MacroWSJ
As we return from a two-week holiday hiatus, markets are looking at the world at the start of 2015 with a little bit of trepidation, but no signs of panic. The euro has dropped to its lowest level in nine years, as expectations for monetary easing from the European Central Bank mix with concerns about the political situation in Greece. And in Asia, Shanghai’s stock exchange restarted trading for the year with a bang, but other markets in Asia were weaker, a reflection in part of the poor economic conditions reflected in purchasing managers readouts in recent days.

Danske DailyDanske Bank

FI Eye-OpenerNordea
Grexit talks, ISM back to reality, EUR/USD and rates still falling

Draghi and Merkel Drive Euro LowerMarc to Market

US OpenZH
Euro, Crude Crash Resumes; US Stock Futures Flat On Grexit Fears; China Soars

OTHER
Global Central Banking in 2015, a First Quarter Update for 25 EconomiesWSJ

Steen's Macro View: 2015 is all in the chartsTradingFloor
Here's a few charts that caught my attention when doing my weekend research. They include an explanation of why the 30-yr US yield is going sub 2.00%; an image of how big the move is in commodities; and a look at whether spiking volatility in bonds is an issue?
  
Thinking About International Bond Yields Krugman / NYT

FINNISH
AamukatsausNordea
Joulukuun inflaatioluvut vievät EKP:n valtionlainaostoksille | Aika päästää irti Kreikasta | USA:n dollari säilyttää yliotteensa

Jos Syriza kuuluu radikaaliin vasemmistoon, niin kuuluvat maailman talousgurutkinHS

Fantastista, sanoisi AngelaProfessorin ajatuksia

Miksi suuryritykset eivät ota kantaa euroon – yritykset ottavat kantaa suoraan näkemiinsä asioihinTyhmyri

Kreikan uusi kaaos ja eurokriisiRoger Wessman

Kreikan euroero olisi kova juttu – ei talouden vaan politiikan vuoksiTyhmyri