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EUROPE
Fischer: Past,
Present, and Future Challenges for the Euro Area – FED
Fed’s
Fischer Calls for Greater European Fiscal Integration – WSJ
Fischer
says euro area can survive crisis – FT
Ifo drops
only marginally in May – Carsten
Brzeski
German IFO
unchanged in May – TF
Cameron
warns of long path to EU reform – FT
EUROPEAN CENTRAL BANK
EU
periphery holds while centre falls apart – FT
QE has
induced volatility in German bonds and relative calm elsewhere
Graphics:
Eurozone Bonds’ Wild Ride – WSJ
The
eurozone crisis has led to an unprecedented era in European bond markets.
Taking
stock of the VaR shock – BNP
PARIBAS
In the
first two weeks of May 2015 yields of US Treasuries and German Bunds have
showed some tentative signs of stabilization after rising sharply in recent
weeks. While it is too soon to conclude that volatility will subside, it is an
opportune time to survey the broader market impact of the rise in 10-year
yields to multi-month highs.
Juhani
Huopainen: Expect Draghi to go epic after Fischer's roast – TF
The ECB's
annual forum got off to a rocky start after the US Fed vice-president Stanley
Fischer basically said the euro was a mistake, crisis management was too slow
and the monetary union has no future without fiscal integration. This is what I
think ECB president Mario Draghi believes, so I expect his speech today to go
all-in, just as he did in July 2012 and in 2014 in Jackson Hole.
Draghi:
Structural Reforms, Inflation and Monetary Policy – ECB
Eurozone
Reform Will Make QE Look Easy – WSJ
ECB's Willful
Ignorance: Leaking Central Bank Says Austerity "Compliments" QE – ZH
UNITED STATES
Summary:
First quarter GDP growth was stronger than originally estimated. When adjusted
for seasonality, the economy grew 1.8%, which is consistent with the average
growth rate over the past three years. It is also consistent with a wide
variety of economic data (employment, wages, housing, consumption) released in
the past several months. And, finally, it is consistent with the message being
sent by the treasury market.
More
Cautious FOMC Looks Set For A September Tightening – Alpha
Now
The FOMC is
uncertain about the persistence of the weakness in Q1 and its implications for
the timing of any policy tightening. The Q2 rebound looks set to be weaker than
we had assumed in our latest quarterly forecast, as the benefits of lower oil
prices are taking longer to come through. But looking ahead, household
expenditure should be supported by further strong gains in employment, and
higher wage growth. We retain our view that the Fed will tighten by September. But
a move as early as June looks far less likely than it did just a month or two
ago.
DATA
Core
Consumer Prices Jump Most Since March 2006 Thanks To Surging Healthcare Costs –
ZH
Illiquid
Markets Turmoil After Hotter-Than-Expected Inflation Print – ZH
ASIA
BoJ:
policy steady but tough choice ahead – Nordea
As expected
the BoJ left the QQE programme unchanged today and revised up its growth
assessment. We still expect an expansion of the QQE in Q4 this year because
inflation is likely to fall behind expectation. Both the market and some BoJ
members have voiced doubt about reaching the inflation target. The BoJ faces a
tough choice ahead.
REGULARS
Daily
Central Banks – WSJ
Blackstone’s
Take: ECB Turns Up Heat on Governments * Fed Proposes Relaxing Rules Impacting
Municipal Bonds * Fed’s Fischer Calls for Greater European Fiscal Integration *
ECB’s Mario Draghi Urges Economic Overhaul in Europe * BOJ Kuroda Strikes Positive Note
on Econ, Sees No Need for Easing
Daily
Macro – WSJ
Danske
Daily – Danske
Bank
Global
Daily – ABN
AMRO
Eurozone
composite PMI falls due to a drop in the services sector PMI… but there are
good reasons to expect a strengthening economic recovery * ECB meeting account
stressed commitment to implement QE in full
Eye-Opener – Nordea
Yellen in
the spotlight, decoupling of EUR and USD rates, USD little changed * US CPI inflation to remain negative * Impact
of ECB’s frontloading move already starting to fade?
Morning
Markets – TF
European
Central Bank president Mario Draghi may well come out swinging this morning
after the US Fed's Stanley Fischer could not resist a swipe at the whole euro
project last night. Expect potential EURUSD fireworks if the language gets
tasty.
Daily FX
Comment – Marc Chandler
Dollar
Heavy into the Weekend
Daily
Shot – TF
Amid the
weak euro the Eurozone shows improvement while earnings growth in the US is slowing down and PMIs there are
falling.
US Open – ZH
Chinese
Stock Bubble Frenzy Returns; US Futures Flat Ahead Of Today's Pre-Holiday Zero
Volume Melt Up
FX
Update – TF
The USD
rally couldn’t find any fresh fuel yesterday and overnight, as the market looks
toward today’s US CPI release for inspiration. The Bank of Japan meeting saw a
mild upgrade to the rhetoric describing the economy, and drove a modest JPY
rally.
From the
Floor – TF
Crude oil
is holding to its gains, helping to push US oil prices over the $60/barrel mark
overnight
Martin
Sandbu’s Free Lunch
– FT
Methods and
madness in economics: Rift breaks open over accusation of 'mathiness'
FINNISH
Aamukatsaus – Nordea
Saksan talousvire heikkenemässä | Japanin keskuspankki piti
osto-ohjelman ennallaan | Maanantaina markkinat suurelta osin kiinni