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Thursday, May 21

21st May - Mediocre May PMIs

Previously on MoreLiver’s:

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Die Zeit’s Q&A on Dr Wolfgang SchäubleYanis Varoufakis

GDP per capita in the EU in 2013Eurostat
Seven capital regions among the ten most prosperous

Germany's record trade surplus is a bigger threat to euro than GreeceThe Telegraph
If EU law were properly enforced, Germany would face fines for endangering eurozone stability and breaching the Macroeconomic Imbalance Procedure for the fifth year in a row

Portugal's "Left-Wing" Forces Threaten Troika RevoltZH

EUR Spreads & Curve: Narrower, flatterNordea
Intra-Euro-area spreads have lacked clear direction in the past few months, something that is likely to continue in the coming weeks. However, spreads have more narrowing potential over the summer, especially if an agreement is reached on Greece. The swap curve is set to re-flatten again going forward, and flatteners offer value.

European FI Strategy: Still lacking escape velocityNordea
The violent sell-off seen in bond markets recently is unlikely to last, and yields are set to fall again over the summer. New yield lows will not be ahead, though. Renewed spread narrowing is still lacking a trigger, but we expect spreads to narrow during the summer, at the latest. Curves should re-flatten, as some of the rise in long yields is reversed.

Bond market overview: What goes up… - Nordea
Following a huge sell-off in Euro-area bond markets, the ECB’s Cœuré finally delivered soothing comments, which should pave the way for a renewed rally in bonds over the coming months. The favourable net cash flow picture will support the bond market during the summer, together with ECB purchases. New lows are unlikely to be reached, though.

Northern Lights: Dealing with uncertaintyNordea
Our monthly overview of Scandinavian macro, FX and fixed income: central bank policies in the Scandinavian countries, our predictions for NOK and SEK, and the need for action in a Finland that is into recession yet again.

JPM Warns UK Referendum More Likely In 2016 Than 2017 - The Pros & Cons Of Brexit – ZH
What Schäuble Said About the U.K.’s EU Renegotiation Plans – WSJ
Latest immigration figures raise the stakes for Cameron’s EU renegotiation – Open Europe

A Finance Minister Fit for a Greek Tragedy?NYT
How politics will seal the fate of Greece – FT
Investors and policy makers eye consequences of Greek default – FT
To avoid Syriza’s fate over the EU, Britain must embrace fudge – FT
Barry Eichengreen: “Weeks away from default unless deal reached”Europp / LSE
Eiffel &Glienicke: Giving Greece a chanceBruegel

ECB to Stop Giving Journalists Advance Copies of Speeches – WSJ
Building a Capital Markets Union – ECB
Account of the April monetary policy meeting – ECB
Draghi Elevates Policy Debate as Governments Seen Falling ShortBB

Global Outlook: Risk Control is WorkingBerenberg
Low oil prices: big boost for Western world, tough luck for Russia * US: consumers and companies in good shape = solid growth after weak Q1 * China: sufficient growth despite slowing trend, risks well contained * Eurozone: oil, exchange rate and ECB boost growth as tail risks fade * UK: solid recovery but mind the politics; Brexit risk receding * Tail risks: Emerging market crash, Putin’s war, Grexit, euro politics?

Steen's Chronicle: The best of times, the worst of times TF
Significant changes to our JABA model's long-term outlook * Inopportune rise in gold and energy prices expected * Commodities will outperform and yields will add another 100 bps * Europe will suffer downturn and the US will flirt with recession in 2016

Japan manufacturing PMI back in expansion territory as orders pick up – Reuters
China: manufacturing PMI improves slightly - appears to have bottomed out – Danske Bank
China: weak industrial sector despite improved headline PMI – Nordea
China factory PMI shrinks for third month, more stimulus seen – Reuters
Weak China factories chill hopes for global bounce, U.S. lift needed – Reuters
Despite Weaker-Than-Expected PMI, Chinese Stocks Stumble – ZH
China shares rally after poor data, dollar holds gains – Reuters

French economy accelerates in May – TF
France’s Recovery Strengthens as Manufacturing Slump Eases – BB
Broad-based slowdown in Germany in May – TF
Germany Loses Further Momentum as Manufacturing, Services Weaken – BB
Is Germany Finally Finding Exports a Bitter Pill? – WSJ
Europe Stocks Drop From Three-Week High Amid Manufacturing Data – BB
US Manuf. PMI To Lowest In 16 Months As New Orders Tumbled – ZH

Daily Central BanksWSJ
Hilsenrath’s Take: Is the Fed’s 2% Inflation Target Too Low? * Fed Minutes Show June Rate Hike Unlikely * Global Banks to Pay Penalties in FX, Libor Probe * Schäuble Won’t Rule Out a Greek Default * Russia Buys More Dollars to Replenish Currency Reserves

Daily MacroWSJ
The mid-May flash manufacturing surveys from Europe and China have painted an underwhelming picture of the global economy. The (modestly) good news is that China’s manufacturing base is not shrinking as fast as it was and that the eurozone’s is still growing.

Danske DailyDanske Bank

Global DailyABN AMRO
Cautiously optimistic FOMC members see June rate hike as too early; September hike still on the cards * ECB reported to give Greek banks more room on ELA * Japan GDP growth stronger than expected, but inventories played a big role

Euro rates updateNordea

Downside risks for Euro-area PMIs * Bond market finding better demand again * Downward move in EUR/USD building momentum

Morning MarketsTF
Today's session will be data-driven, with PMI prints from the Eurozone and the US providing direction for traders looking to test the strength of both economies' recovery.

Daily FX CommentMarc Chandler
Busy UK Shoppers Lift Sterling, Spurs Profit-Taking After Dollar Bounce

Daily ShotTF
The overnight release of a disappointing HSBC PMI report from China has brought fears of a growth slowdown back to the forefront. Chinese equities, however, continue to rally as investors expect a new round of central bank stimulus.

Daily Press SummaryOpen Europe
Schäuble suggests Britain’s concerns can be addressed in talks over the Eurozone’s future * Cameron sets out tough new measures on illegal migration as figures show net migration has reached new highs * Schäuble: “I would have to think very hard” before ruling out a Greek default * France sees Capital Markets Union as means of financing ‘European champions’ * Fears that Isis has sent fighters posing as migrants to Europe across the Mediterranean

Brussels PlaybookPolitico

Despite Weak Economic Data Overnight, Futures Slide On Rate Hike Concerns

FX UpdateTF
There were no real takeaways from last night’s FOMC minutes, as the next major USD catalysts are tough to discern. Meanwhile, we have a possibly interesting Bank of Japan meeting up tonight, which is made doubly interesting by USDJPY’s recent attempts to extract itself from a longstanding range.

From the FloorTF
After the pair has been stuck between the goal posts for so long, could the dollar finally be ready to head higher against the yen?

Martin Sandbu’s Free LunchFT
Slice your cake and grow it too: The famed growth-equality trade-off looks less and less like one

Euroalueen talouteen uskotaan edelleen | Yksityinen kulutus kääntää Fedin pään | Euro jatkoi heikentymistään dollaria vastaan

Roger Wessman: Euroalueen ostopäälliköt: Tasapainoisempaa kasvuaMarketnoze

Roger Wessman: Leikkaukset eivät Suomen kasvua tapaMarketzone