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Tuesday, January 5

5th Jan - An European year begins

Previously on MoreLiver’s:

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Juhani Huopainen: A new year dawns, a new euro crisis beckonsTF
UK’s EU-referendum and France’s presidential polls will be key in Europe * Greece to provide the usual crisis scenario, a repeat of 2015 * Angela Merkel stumbles, but does not fall - a policy shift could be coming

Portugal's Bank Bail-In Sets a Dangerous PrecedentView / BB
As Europe belatedly gets around to repairing its weakest banks, investors who have lent to financial institutions by buying bonds face a brave new world.

The end of Schengen?The Independent
Restrictions by Denmark and Sweden are 'threatening Europe's passport-free zone'

Raoul Ruparel: What to watch in Europe in 2016Open Europe

Euro area: The ECB will not like these inflation numbersNordea

Denmark’s central bank stepped up FX intervention in DecemberDanske Bank

UK: Reduced Brexit risk if a deal is reached in FebruaryNordea
The latest poll from YouGov on voting intention in the planned in-out referendum on EU membership shows an exact 41% to 41% tie. Even though voters seem evenly split in Britain at this stage it’s too early to draw any conclusions from the polls. There is still no “Brexit” plan and we don’t even know when the referendum will actually take place. We believe that the Prime Minister David Cameron will reach a deal on his reform proposals at the European Council meeting in February.

5 Things to Watch in the Fed’s December MinutesWSJ

John J Hardy: What to watch after that rocky start for FX in 2016 TF
After a rocky start, four things may dominate 2016 * Pace of Fed hikes is crucial * Markets' ability to withstand QE removal to be tested * Saudi Arabia could depeg the riyal from the dollar * Will China renminbi devaluations continue apace?

IMF Survey: The Global Economy in 2016IMF
Top goal: a sustainable path for global growth * Emerging markets, developing economies face tougher conditions * Geopolitical tensions magnify economic challenges

Jan von Gerich: Strategy 2016: More divergence in bond spreadsNordea
Supply and demand dynamics suggest Dutch and Irish bonds will be among the winners in 2016, while Austrian and especially Finnish bonds will fare much worse. The pecking order of the semi-core is thus about to see further changes. Spanish bonds will continue to feel the heat of political risks in the near term, but offer potential over Italian bonds longer out.

Martin Enlund: Strategy 2016: What could derail the USD in 2016?Nordea
The USD has been gaining on a trade-weighted basis since 2011, and it has been on an absolute tear for the past two years. Our main scenario is one involving further gains of the greenback also in 2016. Which are the “Gray Swans” which could derail the dollar this year?

PBoC should stop the silliness and float the RMBLars Christensen

The Enigmatic Yen--It is More than an Equity StoryMarc Chandler

Great Graphic: The Euro TouchstoneMarc Chandler

Morning MoneyBeat AsiaWSJ
U.S. Stocks Fall Hard After China Rout

Morning MoneyBeat USWSJ
What a Rough Start to the Year Means for Stocks

Danske DailyDanske Bank

Euro rates updateNordea

China, US and geopolitics weighing on markets * No increase in Euro-area inflation * Risk-off sends global yields lower * Riksbank ready to weaken SEK with FX interventions

Morning MarketsTF
China's steadied the ship with a $20 billion injection but the end of a six-month ban next Monday on institutional sales has left markets fearing an even bigger exodus.

Daily FX CommentMarc Chandler
Focus is Squarely on Equities, Dollar and Yen Firmer

Daily ShotTF
Chinese equities have dragged global markets through the mud since Monday's open and the selloff continued into the New York session. What's going wrong in the Middle Kingdom?

Daily Press SummaryOpen Europe
BBC: Cameron to give ministers free rein in EU referendum campaign * Merkel rejects call by sister party to cap refugees at 200,000 * Britain’s aid spending far outstrips that of France and Germany * European Commission to review Polish government’s actions on constitutional court and media – but no formal investigation yet * Denmark reintroduces checks on its border with Germany * Channel Tunnel runner granted asylum in the UK * Rajoy asks Socialists for support to form new Spanish government * Creditors expected to seek changes to Greek government plan for pension reform * Leader of Catalan anti-system party gives up seat as deadline to form new regional government approaches

Brussels PlaybookPolitico
Poland’s PR pushback — Migration rumbles

Stocks Resume Rout After Massive Chinese Intervention Fails To Lift Shanghai, Calm Traders


FX UpdateTF
The action in EURUSD has been bottled up in a narrow range since the December 3 ECB shocker but now it looks like time to test the lower edge of the range around 1.0800 possibly on another weak Eurozone CPI print today.

From the FloorTF
While stocks were plummeting yesterday the reaction was particularly strong among Germany's biggest equities opening up a potential short-term trade.

Valuuttavuosi 2016 – mitä luvassa? * Riksbankin pääjohtajalle valtuudet päättää valuuttainterventioista * Kiinan teollisuussektorin vaikeudet todennäköisesti lisäävät elvytystoimia * USA:n teollisuuden luottamus putosi heikoimmalle tasolleen sitten finanssikriisin

Heikko Eurooppa – kenen syytä se on Tyhmyri