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Monday, February 2

2nd Feb - Busy week begins with Greece's grand tour

Previously on MoreLiver’s:

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Mark Carney: Fortune favours the boldBoE
Thank Carney for Meddling in EuropeView / BB

Real effects of credit rating downgradesvoxeu
In the wake of the Crisis, policymakers have introduced liquidity regulation to promote the resilience of banks and lower the social cost of crisis management. This column shows that a funding liquidity shock, manifested as lower access to wholesale sources of funding following a credit rating downgrade, translates into a significant decline in both domestic and foreign lending. Liquidity self-insurance by banks mitigates the impact of a credit rating downgrade on lending.

Podemos Seeks to Restructure Public Sector DebtBB

Fear of deflation driving Riksbank strategyTradingFloor
Riksbank meeting on February 12 could be pivotal for direction of SEK * Riksbank concerned with spectre of deflation but SNB-style option unlikely * Swedish housing bubble an increasing area of concern for central bank

SNB unofficially targeting 1.05/1.10 francs/euro - sources – Reuters
Denmark halts bond issues in surprise move to keep crown stable – Reuters
Currency War Claims Another Casualty: DenmarkView / BB
The Danish central bank digs deeper into its armoury – Nordea


Groundhog Day in Greecevoxeu
The Greek-Troika conflict is roiling markets, boardrooms and cabinet offices around the world.  Crises are best solved by recognising losses, allocating them and moving on, so the biggest risk, this column argues, is that a compromise kicks the can further down the road.  As the can rolls on, the scenery becomes politically and socially less attractive – fuelling the rise of political animosities, nationalism, and fringe parties.  Greece is a special case but indicative of the core problem – deficient EZ governance structures that mean societies are stuck with increasing socioeconomic exclusion and political despair. The crisis will continue until the necessary further deepening of EZ institutional structures is completed.

The “Greek Issue”: flowchart from Deutsche Bank – Ritholtz
Greece hires Lazard to advise on debt – FT
Could Tsipras Upset Balance of Power in Europe? – Spiegel
Kiron Sarkar on Greece – Ritholtz
Saying the obvious – Simon Wren-Lewis

Syriza Walks Back Initial DefianceYves Smith
Greece’s problems are the result of the eurozone having no fiscal policy – The Guardian
Coppola: Media Misinformation On Greece Misleads European Leaders – Forbes
France ‘prepared to support Greece’ in debt renegotiations – France24
Grexit risk in Q&A: Two steps back and one forwardDanske Bank

Greece Wants Special ECB Help While Going ‘Cold Turkey’ on Aid – BB
Merkel Said to Avoid Meeting Tsipras, Doubt Tax Plans – BB
Eurozone alarm grows over Greek bailout brinkmanship – FT
Münchau: Grexit is an avoidable catastrophe for the eurozone – FT
My Friend Yanis, The Greek Minister Of FinanceForbes

Greece shakes Europe's political kaleidoscope: expect the unexpected – Reuters
Greek turmoil an unexpected boon for German AfD eurosceptics – Reuters
Turmoil at congress of Germany party swiping votes from Merkel – Reuters
Obama Expresses Sympathy for New Greek Government – WSJ
Obama "Expresses Sympathy"; Lazard Says 50% Haircut "Reasonable" – ZH

Dear Eurozone officials, Mr Putin is waiting – Bronte Capital
Europe Should Call Greece's BluffView / BB
Karl Whelan: What’s Going On with Greece and the ECB?Medium
[Dec 2014] 2014 is not 2012Macropolis
Greek finmin to tell investors Greece will service debt – source – Reuters

5 Questions About the ECB’s Complicated Relationship With Greece – WSJ
Kenneth Rogoff: What Is Plan B for Greece? – Project Syndicate
Chaos, Fear, Panic Descend on EU’s Hallowed Halls of Power – Wolf Street
Greece rules out aid from Russia, argues case in EuropeReuters
Greece and the euro area need a deal within days, not monthsBruegel

George Osborne warns Greek debt standoff is threatening global economy – The Guardian
George Osborne warns Greek stand-off poses ‘greatest’ risk – FT
Britain's Osborne says Greek stand-off biggest risk to the global economy – Reuters
Osborne Says Global Economy at Risk from Greece Stand-Off – BB
Greece Just Blew Up the Empire's Death Star of Debt – Charles Smith

ECB Coeure: QE Program is Open Ended WSJ

Coeure Says ECB Will Take Existing Maturities as Guide for QEBB
Coeure: “In terms of the maturity allocation within a given sovereign bond universe, it will be broadly based on market outstandings. There is very little leeway for discussion or readjustment and we want to create as little market distortion as possible.”

European banks: Easing means squeezing The Economist
Quantitative easing has both good and bad implications for Europe’s banks

ECB Bond-Buying Plan Has Investors Questioning How It All WorksBB

Bill Gross says European QE is ‘too little, too late’FT

Lamfalussy was right: independence and interdependence in a monetary unionECB
Speech by Benoît Cœuré, Member of the Executive Board of the ECB, at Lamfalussy Lecture Conference organised by Magyar Nemzeti Bank in Budapest, 2 February 2015

As of Yet, Fed Not Changing TuneTim Duy
I am not convinced the Fed is changing its thinking as quickly as markets think the Fed is changing its thinking. That means that Fedspeak might continue to be hawkish relative to expectations.

US labour compensation updateFT
Leading indicators of wage growth are ticking upwards, though not sharply

Personal Income +0.3% in December, Core PCE prices +1.3% YoY – Calculated Risk
Consumer Spending Declined in December by Most in Five Years – BB
Don't Freak Out About December's Drop in Consumer Spending – BB
U.S. consumer spending weakest since 2009, inflation muted – Reuters
Inflation Reading Furthest Away From Fed Target Since 2009 – WSJ

Reserve Bank of Australia set to cut interest rates tomorrowTradingFloor
The Reserve Bank of Australia is in a tricky position. The last thing a strong housing market needs is lower interest rates, but on the other hand the economy is slowing, commodity prices falling, unemployment rising and inflation headed towards the lower end of the target band.

Digging into China’s debtsFT
Since 2008, debts owed by China’s nonfinancial sector have soared by more than 90 percentage points relative to GDP. Almost all of that increase can be attributed to corporate borrowers.

Daily Central BanksWSJ
Hilsenrath’s Take:Yellen Prepared to Fight A Revived “Audit the Fed” Movement * Fed’s Tarullo Zeroes In on Risk From Asset Managers * Fed’s Williams Upbeat on Economy, Says Summer Rate Rise Likely * ECB’s Constancio Denies QE Was Delayed by German Opposition * Denmark Suspends Bond Issuance to Protect Krone’s Peg

Daily MacroWSJ
China’s manufacturing sector, whose expansion over the past three decades was largely responsible for converting the country into the world’s second-largest economy, is now indisputably in contraction, according to purchasing manager indexes out Monday. That will weigh on growth elsewhere.

Danske DailyDanske Bank

Danish central bank fights back * China slows * US ISM expected down but still solid * US 10-year yield plummets to its lowest since May 2013 * Disappointing data will challenge USD strength

Dollar Consolidates in Choppy ActivityMarc to Market

Daily ShotTradingFloor
The political winds are shifting in the eurozone * Rate hike expectations in the UK have fallen dramatically * More concerns about Canada's economy

Futures Attempt Bounce On Sudden Rebound In Crude

FX UpdateTradingFloor
The US dollar picture looks quite healthy, particularly given the market’s very complacent view on the US Federal Reserve’s policy stance. The latter leaves the market highly sensitive to US data surprises this week, particularly if they are positive. Also – the market is increasingly positioned for an Reserve Bank of Australia cut – will it deliver?

From the floorTradingFloor
The market is out of step with the FOMC and with a potentially pivotal week of US data ahead, any surprises to the upside could see some real impact on the market with dollar strength likely to ensue. And forget that rally in oil – fundamentals continue to underpin a move downwards.

Dollar DriversMarc to Market
The bull case for the US dollar rests on two legs. The first is that the policy response to the crisis has produced superior economic results in the US that would lead to the Fed raising rates later this year. The second was the ongoing challenges faced by Europe and Japan.  For several months both legs had strengthened.

An Unconventional TruthProject Syndicate
Nouriel Roubini: To be effective, monetary stimulus must be accompanied by temporary fiscal stimulus, which is now lacking in all major economies. That is why, given persistent insufficient aggregate demand, unconventional monetary policies will remain a central feature of the macroeconomic landscape.

KVP Macro Take: Watch central bank moves and the rupee revivalTradingFloor
The key focus will be on the Reserve Bank of Australia and the Reserve Bank of India on Tuesday and the Bank of England on Thursday. There are also quite a few Federal Reserve and European Central bank speakers this week.

The Matrix: A strategist’s roving thoughts - shaken but not stirredTradingFloor
Kay Van-Petersen: A high conviction take on the USDCHF still prevails; thoughts on Yahoo's spin-off from Alibaba; a mea culpa on fourth quarter US GDP and checking out the media with Bloomberg and Investor Insights.

Week ahead rich in events: Greece, Denmark, ECBTradingFloor
The beginning week is filled with events that escape the hasty viewer of economic data release calendars. Be ready for Greek panic, additional information on the European Central Bank's asset purchase program and Denmark's attempts to maintain the EURDKK exchange rate within the narrow confines of the ERM2.

16% Of Global Government Bonds Now Have A Negative Yield: Here Is Who's Buying ItZH

US Treasury yields and shrinkage, sovereign bond availability editionFT
Summing across the U.S., Japan and the Eurozone, almost $800 billion in debt instruments will have to be pried from the hands of private investors over the next two years

The decline in inflation compensationBruegel
Fed and ECB officials appear to have interpreted market measures of inflation compensation differently

Negative govvies: why would ya?FT
The total universe of government bonds traded with a negative yield was $3.6tr last week or 16 per cent of the JPM Global Government Bond Index. A list of those willing/ forced to buy those negative yielding government bonds.

What Negative Bond Yields Mean for InvestorsWSJ

Disinflation in EU Countries outside the EurozoneiMFdirect


China: weak manufacturing strengthens case for more easing – Danske Bank
Chinese Stocks Tumble, Yuan Plunges – ZH
Deflation the danger as China's factories struggle – Reuters
China's Feeling the Pressure to Join Global Easing – BB

ISM Manufacturing Tumbles To One-Year Lows As New Orders Crater – ZH
US Manufacturing "Remains In Low Gear" - Hovers Near One-Year Lows – ZH
ISM Manufacturing index declined to 53.5 in January – Calculated Risk
Manufacturing in U.S. Expands at Slowest Pace in a Year – BB
ISM Manufacturing Report Disappoints – Bespoke

Aamukatsaus Nordea
Yhdysvallat nostaa ohjauskorkoa vasta syyskuussa | Euroopasta tärkeää tietoa Suomen suhdannekuvaan | Euroalueen inflaatio hidastui tammikuussa selvästi

Jan Hurri: Kolme tapaa laskea Suomen Kreikka-riskit TalSa
Suomen ja Kreikan väliset suorat ja epäsuorat rahoitussuhteet ovat sellaista palapeliä, että Suomen Kreikka-riskeistä ei tahdo saada selvää edes miljardin euron tarkkuudella. Arviot Suomen Kreikka-altistumasta vaihtelevatkin helposti alle neljästä yli kahdeksaan miljardiin euroon sen mukaan, mitä lukuihin lasketaan mukaan ja mitä ei.

Valtioiden tekemät sopimukset ja demokratia Tyhmyri
Demokratiaan kuuluu sopimusten purkaminen

Kreikan rahaministerin näkemykset ovat rehellisyyttä arvostavalle masentavaa luettavaaHS

EVA maahanmuuttajien asialla Libera

IL:n tutkimus: kansalaisten leikkauslista vastaa ”häkellyttävän hyvin” PS:n esityksiäPS

”Te tapoitte juuri troikan”PS

Ollaanko Kreikasta tekemässä varoittava esimerkki?Peter Nyberg

"Kolmikannan jähmeät päätösrakenteet eivät ole kansakunnan etu"Verkkouutiset
Kansanedustaja Elina Lepomäki (kok.) haastaa kolmikantaista päätöksentekoa sosiaaliturvakysymyksissä. Akavan Sture Fjäder (kok.) ei lämpene radikaaleille ehdotuksille.

Deflaatiota vai ei?Sakari Heikkinen

Suomen Ekonomit palkitsivat talousymmärrystä luovan kirjanVerkkouutiset
Sixten Korkman on saanut Suomen Ekonomien kirjallisuuspalkinnon.