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Monday, March 23

23rd Mar - Greece in spotlight

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Regional parliamentary election weakens Spain’s two-party systemThe Guardian
Court Finds Rajoy's Ruling Party May Have Had Secret AccountsZH

France: Blow to premier Valls as Socialists come third in local electionsFT

Consequences, challenges and opportunities facing Britain outside the EUOpen Europe
UK GDP could be 2.2% lower in 2030 if Britain leaves the EU and fails to strike a deal with the EU or reverts into protectionism. In a best case scenario, under which the UK manages to enter into liberal trade arrangements with the EU and the rest of the world, whilst pursuing large-scale deregulation at home, Britain could be better off by 1.6% of GDP in 2030. However, a far more realistic range is between a 0.8% permanent loss to GDP in 2030 and a 0.6% permanent gain in GDP in 2030, in scenarios where Britain mixes policy approaches.

Merkel meets Tsipras, pressured to take tough line – FT
Greece Faces Decisive Week as Tsipras Is Set to Meet Merkel – BB
Q&A: As Greece and creditors squabble, cash is running out – FT
Deutsche Bank:  What Happens After The Grexit – FT

Wolfgang Münchau: The success of eurozone QE relies on a confidence trickFT
Programme’s impact unknown without evidence of how the policy transmits to the real economy

Speech Mario DraghiECB
Introductory remarks at the EP’s Economic and Monetary Affairs Committee

Prepare for Fed hikesDanske Bank
Market pricing of Fed funds rate hikes over the coming four years is extremely subdued. We see a significant potential for a re-pricing of this pace over the coming six months. We expect the first rate hike from the Fed to come in September this year.

Fed ‘lift-off’ is to destination unknownFT
US rate rise journey is likely to be turbulent for investors

Currency wars rebound on the FedFT
The Fed has discovered that currency wars, or “competitive” monetary easing, can apply in both directions. Ideally, it may want to raise US interest rates in June. But, like the other major central banks, it is no longer in full control of its own destiny. Global monetary conditions just keep getting easier.

Is the Fed bluffing on rate hikes?FT
If core inflation ends up lower by year-end, BoAML believes the Fed’s policy statement language makes clear the central bank will find it difficult to hike in that scenario.

The dollar’s surge may be over WaPo
There's no inflation, no bubbly behavior, just no reason to increase rates anytime soon. And that would mean there isn't any more reason for the dollar to go up.

Daily Central BanksWSJ
Hilsenrath’s Take: Disappearing Hawks and Other Reasons for Fed Forecast Shift * Fed’s Lockhart Sees Rate Increase in June, July or September * Fed’s Mester: Fed Needs Further Refinements Of Forward Guidance * Fed Sent Nearly $97 Billion to the U.S. Treasury in 2014 * Torrent of Cash Exits Eurozone

Daily MacroWSJ
Today’s news from around the European Union suggests that, despite the improvements in some of the eurozone’s economic numbers, there are still serious problems to be resolved before markets can comfortable with a stable outlook.

Danske DailyDanske Bank

Euro rates updateNordea

China PMI to soften * EUR swaps consolidate at all-time lows * EUR/USD correction not over yet

Daily FX CommentMarc to Market
Dollar Recovers from Lower Opening

Daily ShotTF
Crude oil output is increasing, putting pressure on prices despite a weaker USD. Energy companies meanwhile are about to massively cut fixed investment, which sooner or later should lead to lower production. Half of 66 research groups asked are expecting a Fed rate hike this June. Even if this sounds premature, we should not expect a crash as in 1937.

Daily Press SummaryOpen Europe
Whether Britain is better off in or out of the EU depends on a series of tough choices * Greek PM heads to Berlin amid warnings Greece will run out of cash in early April * Front National obtains highest-ever score in a French local election * Spanish Socialists to retain power in Andalusia as Podemos storms in as third-largest party * Ukraine will not repay $3bn bond owed to Russia

Buying Euphoria Fizzles Ahead Of Make Or Break Tsipras-Merkel Talks

FX UpdateTF
The USD is on the defensive to start the week after last week’s dovish FOMC meeting, but assessing the prospects for further potential downside are difficult due to the extremely choppy price action. With few key US data risks this week, the risk of treacherous price action is likely to continue.

From the FloorTF
NZD leads EM currencies spurt after FOMC dollar negativity, to hit 2-month high * Kiwi "over-achieving" as dollar reaction to meeting still unwinding, says Hardy * Asian markets shoot to new highs led by Shanghai Composite Index * FX Options liquidity "extremely poor" as two-way moves open on EURUSD * Commodities decimated as exodus of positions gathers pace, says Hansen * Gold looking to challenge $1,190/oz area but upside limited * Oil getting some support but signals still pointing down * Saudi Arabia sticks to production guns to pump new record

Martin Sandbu’s Free LunchFT
Productivity problems: Europe is failing at the biggest economic test there is

FX: turning pointsNordea
Blame the US economic data disappointments for the recent strength in USD and lower yields. Are we there yet?!

The dollar surgeBruegel
The US dollar has gone through a very rapid appreciation over the past 6 months. While reduced form estimates are often presented to argue that this will create a drag on the US economy, it is difficult to reason from a price change and the net effect could be positive if the price change is mostly driven by expansionary monetary policy abroad. In emerging economies, currency mismatches remain despite the recent increase in local currency sovereign debt and may create significant risks.

Economists agree: deflation is either good, or bad, or irrelevantFT
Central bankers would be better off concentrating on the financial cycle — the interaction between asset prices and leverage that gives us the big booms and deep busts — and spending less time worrying about keeping the price growth of goods and services confined to such a narrow band.

Aamukatsaus Nordea
Euroalueen ostopäällikköindeksit viestivät kiihtyvästä kasvusta | Merkel ja Tsipras tapaavat tänään Berliinissä | USA:n inflaatio on todennäköisesti jatkunut heikkona

Suurtyöttömyyden seuraus: Työttömyysvakuutusrahasto varautuu velanottoonYLE
TVR:n menot kasvoivat viime vuonna lähes neljänneksellä edellisvuodesta. Rahaston budjettialijäämä kasvoi 400 miljoonaa euroa arvioitua suuremmaksi.

Innovaatioiden perusta mureneeEVA
Yhdeksän ehdotusta yliopistojärjestelmän korjaamiseksi

Kreikan velkojille kylmää vettä niskaanHenri Myllyniemi / US

Raportti: Suomi pulassa jos tulee uusia talouskriisejäYLE
Kansainvälisesti tarkasteltuna Suomen takaukset ovat VM:n mukaan korkealla tasolla. Pahoja yllätyksiä voi kriisitilanteessa tulla siitäkin, että Suomen valtion vastuista on ollut mahdotonta muodostaa kokonaiskuvaa.

Finnveran takauksia ei voi enää kasvattaa – valtion riskit merkittäviäVerkkouutiset
Valtion taloudelliset vastuut ovat kasvaneet merkittävästi, ja niiden laukeaminen voisi heikentää Suomen taloudellista asemaa entisestään.

Näkökulma: VM haluaa seuraavan hallituksen tiukkaan holhoukseen YLE
Suomen talous on siinä jamassa, ettei poliittiseen vatulointiin enää ole varaa. Valtiovarainministeriö yrittää saada poliitikot sellaiseen liekaan, että päätökset myös toteutuvat, kirjoittaa Ylen taloustoimittaja Hanna Säntti.

Talousprofessorin mukaan puolueet, ekonomistit ja järjestöt ovat väärässäHS
 Professori Pertti Haaparanta ihmettelee vaatimuksia julkisen talouden leikkauksista: "Suomen talouspuhe täysin epä-älyllistä"

Haaparanta: Hollannin yskä Suomeen?Akateeminen talousblogi

VM:n Hetemäki vastaa Haaparannalle: Suomi on elvyttänyt kuusi vuotta HS

Korkman vastaa Haaparannalle: Pitääkö leikata vai elvyttää? HS