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Thursday, June 11

11th Jun - Greece running out of time

Previously on MoreLiver’s:

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Ashoka Mody: David Cameron and the EU’s WaterlooProject Syndicate
The UK, whose new majority Conservative government has pledged to hold a referendum on EU membership by the end of 2017, is at the vanguard of Europe’s institutional atrophy. Even if the UK stays, it will continue to move steadily away from Europe; and, unless EU leaders understand why, most European countries will follow suit.

Despite the crisis, Portugal’s 2015 election will be a straight contest between the country’s two mainstream partiesEuropp / LSE

Euro area Economic Outlook: A stable but not really strong recoveryNordea
We confirm our forecast for GDP growth: 1.3% this year and 1.6% in 2016. With these numbers, we are below the consensus forecast and the ECB’s projections. On a country level, the recovery will remain fairly broad based. Private consumption should continue to be the main growth driver while capital spending remains the missing link for a stronger recovery. The benign inflation outlook offers the ECB leeway to support the recovery for a long time.

Spain’s “beautiful deleveraging” shows euro area’s limitationsFT
Despite doing (basically) everything right, Spain’s membership in the euro has left it at the mercy of forces far stronger than anything even the most competent and responsible national institutions can handle.

European banks: Healing continuesDB Research
European banks had a successful start into 2015. Business activity improved, asset quality did so as well and profitability rose again, as the rebalancing of the industry made further progress. The ECB’s new large-scale market interventions helped strengthen sentiment in financial markets, and contributed to the continuing decline in the euro exchange rate – which on balance may have been beneficial for banks.

You Think Rising Eurozone Yields Are a Problem? Consider This… - WSJ
ECB's Coeure says any euro exit would be warning for EuropeReuters
The departure of any country from the euro zone would be a warning sign for Europe, adding that he expected Greece to stay inside the currency bloc.

News in Charts: This Is Not The End Of ECB QE… - Alpha Now
Despite a few straws in the data, the euro area recovery is far from established. Consequently, it is far too early to be thinking about ECB drawdown – there is plenty more QE to come.

EU tells Greece's Tsipras: time's up, no more gambling – Reuters
Tusk Says Greece Must Bow to Reality as Gambling Now Over – BB
IMF Team Leaves Brussels After Making No Progress on Greek Deal – BB
Time to decide, creditors tell GreeceFT
Did Greece's Time Just Run Out? – ZH

Survey: Fed Forecasts for the Economy and Interest Rates Could Edge DownWSJ
Survey: Economists Think Fed Won’t Raise Rates Before SeptemberWSJ

Retail Sales increased 1.2% in May – Bill McBride
Americans Finally Went Shopping in May – WSJ
US retail sales jump 1.2% in May – TF
Retail sales jump in May, brighten growth outlook – Reuters
Retail Sales Rise, Economists Feeling Better About the Economy – WSJ
Strong retail sales show US consumer still alive – Danske Bank

Great Graphic: German Bunds, Inflation Expectations and the EuroMarc Chandler

The Big Picture: Reflation theme buildingDanske Bank
China and the US to pick up the pace after weak Q1, euro-area recovery continues * A reflation theme is building - global growth recovers alongside rising inflation * Output gaps close faster than expected due to fall in potential growth rates * The Fed hiking cycle should be slow - but not as slow as the market expects * ECB to continue QE until September 2016 but exit talk set to start earlie

Shaken, rotated, positionedFT
Barclays have had a look at the reaction of various types of investor since markets started to move around with energy in April.

Steen Jakobsen’s Macro DigestTF
Forget the 1930s, inflation is different this time * Real rates are finally coming off in the US * More and more pundits see inflation ticking higher * A summer of European growth – and hell afterwards * ECB's balance sheet as % of GDP little changed despite QE * The credit cycle has clearly peaked

Recap 2015-06-10: FCI, Historical AnalogGlobal Macro Trading
One of the things that have been unusual about recent market moves is that credit spreads has not been tightening with the move up in global risk free yields. Here is a chart of the US long term BBB yield vs the 30yr Treasury yield. Note that unlike what happened during the Taper Tantrum, where credit spreads were broadly stable or even tightened, over the past 6 months, spreads have unambiguously widened.

Daily Central BanksWSJ
Douglas’ Take: While Open to Tweaks, Carney Sees Liquidity Staying Expensive * ECB’s Weidmann Says Risk of Greek Insolvency Increasing Daily * For Japan, Exiting Stimulus Will Be a Delicate Balance * South Korea Cuts Interest Rate as Fears of MERS Economic Toll Mount * New Zealand Central Bank Cuts Key Interest Rate, Signals More Easing

Daily MacroWSJ
Greece Gets Emergency Aid; South Korea, New Zealand Cut Rates

Morning MoneyBeat AsiaWSJ
Stocks Jump After Signs of Progress on Greece

Morning MoneyBeat EuropeWSJ
Greek Headlines Likely to Dominate Once More

Morning MoneyBeat USWSJ
Stocks Bounce Back. Is More Buying In Store?

Danske DailyDanske Bank

Global Daily: Five factors the ECB will watchABN AMRO
ECB QE has been a dominant theme in markets – the timing of QExit will also be a big deal * We set out the five big factors the Governing Council will be looking at to decide on policy…they are growth momentum, inflation, financial conditions, Fed rates and Grexit

Euro rates updateNordea

Still higher yields, never-ending Greek saga, US retail sales: Signs of life among US consumers? * German 10-year yield breaches 1% * USD/JPY with a big move lower on the back of Kuroda’s comments

Morning MarketsTF
Today's data calendar is packed with key releases, with investors keenly awaiting retail sales and sentiment figures that will either quell or amplify fears about US consumer spending.

Daily FX CommentMarc Chandler
Will a Strong Retail Sales Report Help the Dollar?

Daily ShotTF
New Zealand's rate cut may have shocked markets, but South Korea's move was broadly expected. Both economies, however, face similar pressures in the form of weaker exports, flagging manufacturing and disinflation.

Daily Press SummaryOpen Europe
Osborne: New EU settlement must protect integrity of single market * Further round of talks between Tsipras, Merkel and Hollande yields no breakthrough * Austrian Foreign Minister: We should “face” Treaty change * Die Welt: Brexit more dangerous for Germany than Grexit * Italian Finance Minister calls for Eurozone unemployment insurance scheme * Polish PM forces senior politicans to resign to arrest falling support

Brussels PlaybookPolitico

Futures Flat As Latest Greek Euphoria Questioned; Chinese Economy Bounces In Night Of Rate Cuts


FX UpdateTF
The RBNZ cut rates as only a minority of analysts expected and unveiled a firmly dovish message that took Kiwi on a nosedive to 0.7000 in NZDUSD overnight. Today’s US Retail Sales is the economic calendar highlight of the week.

From the FloorTF
Rich pickings for From the Floor today with that NZD plunge overnight, the bund's continued woes and the growing possibility perhaps of a Fed rate hike in September all vying for front-page attention.

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