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Tuesday, January 26

26th Jan - Anticipatory bull ahead of Fed



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EUROPE
Getting a Handle on Italy's Banks – Marc Chandler

Deutsche Bank Warns ECB Further QE Will Push Stocks Lower – ZH

  MIGRANT CRISIS
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


UNITED STATES
FOMC preview: Fed to sound mildly dovish – Nordea
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 Reserve – BB
Choppy markets could mean a central bank in “risk management” mode.

Chances of a Fed Rate Increase Fall After Market Selloff – BB

5 Things to Watch at the Fed Meeting – WSJ

The Federal Reserve may have made a huge mistake – WaPo

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


OTHER
Cheaper Oil May Hurt More Than Help Importers, Citigroup Says – BB
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 markets – FT
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 old – BIS
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.


REGULARS
Morning MoneyBeat Asia – WSJ
U.S. Stocks Scuttle Last Week’s Gains

Morning MoneyBeat US – WSJ
Can Apple Save the Day When It Reports Profits?

Danske Daily – Danske Bank

Euro rates update – Nordea

Eye-Opener – Nordea
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 Markets – TF
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 Shot – TF
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 Summary – Open 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 Playbook – Politico
Danish debate — French road rage — Schengen scenarios

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

Frontrunning – ZH

FX Update – TF
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 Floor – TF
The developing correlation between oil and equities is strengthening as investors are beginning to fear a large-scale energy sector credit event.


FINNISH
Aamukatsaus – Nordea
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 pakolaisilta – TalSa
Rikollisten masinoima maahanmuuttoaalto estää EU-maita auttamasta niitä, jotka apua kaipaisivat kaikista kipeimmin. EU:n on otettava ohjakset omiin käsiinsä.

Pörssiyhtiöt menettäneet miljoonia valetoimitusjohtajille – YLE
FBI: Valetoimitusjohtajat vieneet lähes kaksi miljardia euroa – YLE

  TALOUSPOLITIIKAN  ARVIOINTINEUVOSTO

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 suuria – TalSa

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

Hallituksen talouslinjaukset saavat sapiskaa talouspolitiikan arviointineuvostolta – HS
Neuvosto arvioi pakkolakipakettia ”riskialttiiksi” ja kummeksuu verolinjauksia.

The EU’s Fiscal Targets and Their Economic Impact in Finland – ETLA

Tuloverotuksen vaikutus työn tarjontaan – VATT