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Tuesday, January 26

26th Jan - Anticipatory bull ahead of Fed

Previously on MoreLiver’s:

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Getting a Handle on Italy's BanksMarc Chandler

Deutsche Bank Warns ECB Further QE Will Push Stocks LowerZH

Editorial: How to Manage Europe's Refugee Emergency – View / BB
Juncker drops Greece, bets on Macedonia – Politico
Denmark’s refugee asset grab – Politico
Asylum-seekers paid the Netherlands €500,000 in three years – Politico

FOMC preview: Fed to sound mildly dovishNordea
The Fed will take a “wait-and-see” attitude at this week’s FOMC meeting. Although the central bank is likely to sound mildly dovish, acknowledging the increased risks to the outlook posed by the recent tightening of financial conditions, it is unlikely at this point to give any clear hints about the likely outcome of the March meeting. For now, our baseline scenario is still that the next hike will be in March, but it has become a close call.

Tim Duy: The Five Scenarios Now Facing the Federal ReserveBB
Choppy markets could mean a central bank in “risk management” mode.

Chances of a Fed Rate Increase Fall After Market SelloffBB

5 Things to Watch at the Fed MeetingWSJ

The Federal Reserve may have made a huge mistakeWaPo

Paul Krugman: Fed’s Fumble – hike was a mistake?NYT

Cheaper Oil May Hurt More Than Help Importers, Citigroup SaysBB
Sovereign wealth funds cut EM investments $50 billion in 2015 * Oil exporters may post 1st current account deficit since 1998

In charts: why oil prices are influencing global equity marketsFT
Length of correlation between the two is set to shape investment allocation decisions

How do global investors differentiate between sovereign risks? The new normal versus the oldBIS
When global investors go into emerging markets or get out of them, how do they differentiate between economies? Has this behaviour changed since the crisis of 2008 to reflect a "new normal"? ... we find an old normal in which a single global risk factor drives half of the variation in returns and a new normal in which that risk factor becomes even more dominant. Surprisingly, in both the old and new normal, the way countries load on this factor depends not so much on economic fundamentals as on whether they are designated an emerging market.

Morning MoneyBeat AsiaWSJ
U.S. Stocks Scuttle Last Week’s Gains

Morning MoneyBeat USWSJ
Can Apple Save the Day When It Reports Profits?

Danske DailyDanske Bank

Euro rates updateNordea

Risk aversion is back; oil prices down * Steadfast US shoppers? * Safe-haven flows dominate bond markets * EUR and JPY stronger on lower oil prices

Morning MarketsTF
Oil's relentless slide knocked stocks lower overnight on Wall Street and again on Tuesday in an Asian session awash with red especially on China's Shanghai Composite.

Daily FX Comment Marc Chandler
It may Feel Bad, but Its Different

Daily ShotTF
As crude oil and equities tango in ever-increasing synchronicity the black stuff dips below $30/barrel once more and leading global indices are being hammered. Meanwhile Chinese capital outflows look very alarming Hong Kong stocks pose an interesting conundrum and why are equities ignoring the benefits of cheap oil?

Daily Press SummaryOpen Europe
EU Wargames: EU migration and striking a deal on services most contentious points in post-Brexit world * UK and Germany in discussions over earnings threshold for access to welfare * EU member states consider extending internal border checks for up to two years * Draghi hits out at critics and hints at further easing * Europol warns that IS has developed capability for more attacks in Europe * On-going refugee crisis exposes divisions within CDU/CSU camp * Creditors give Greece little wiggle room on implementation of bailout

Brussels PlaybookPolitico
Danish debate — French road rage — Schengen scenarios

Last Hour Panic Selling Sends Chinese Stocks Crashing To 13 Month Low; Crude, Stock Futures Tumble Then Rebound


FX UpdateTF
Risk sentiment crumbled once again in the US yesterday taking the usual suspects in currency land for a trip south including emerging market currencies and CAD. It’s clear that the market wants to hear comforting words at tomorrow’s FOMC meeting.

From the FloorTF
The developing correlation between oil and equities is strengthening as investors are beginning to fear a large-scale energy sector credit event.

Saksan luottamus horjuu kehittyvien talouksien heikkouden vuoksi * Irak pumppasi öljyä ennätystahtiin joulukuussa * Öljyn hinnanlasku kasvatti turvasatamakysyntää * USA:n kuluttajien luottamus pysyy korkealla

Risto Pennanen: Turistit vievät tilaa pakolaisiltaTalSa
Rikollisten masinoima maahanmuuttoaalto estää EU-maita auttamasta niitä, jotka apua kaipaisivat kaikista kipeimmin. EU:n on otettava ohjakset omiin käsiinsä.

Pörssiyhtiöt menettäneet miljoonia valetoimitusjohtajilleYLE
FBI: Valetoimitusjohtajat vieneet lähes kaksi miljardia euroaYLE


Talouspolitiikan arviointineuvosto repii auki hallituksen keinopakettia YLE
Kilpailukykypaketin ja pakkolakien laskelmat eivät ole kohdallaan, lisäksi leikkaukset koulutukseen syövät Suomen tulevaa kasvua. Näin lataa Talouspolitiikan arviointineuvosto kritiikkiä hallituksen sopeutustoimista. Sen sijaan suurta kuvaa eli sopeutustoimien mitoitusta ja aikataulua kiitellään.

Professorit pakkolakien työllisyysvaikutuksista: Epärealistisen suuriaTalSa

Hallituksen pitäisi välttää koulutuksen laatuun ja tutkimukseen kohdistuvia leikkauksia. Näin arvioi viidestä professorista koostuva talouspolitiikkaa arvioiva neuvosto.

Hallituksen talouslinjaukset saavat sapiskaa talouspolitiikan arviointineuvostoltaHS
Neuvosto arvioi pakkolakipakettia ”riskialttiiksi” ja kummeksuu verolinjauksia.

The EU’s Fiscal Targets and Their Economic Impact in FinlandETLA

Tuloverotuksen vaikutus työn tarjontaanVATT