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EUROPE
The
dissolution of the agreement that instituted passport-free travel within Europe
need not mean the end of the EU. But it threatens to undermine the foundational
goal of “ever closer union."
His
enemies call him the ‘PM’s puppet-master’. Blair, Brown and Cameron all found
him invaluable. He’s been at the heart of the most controversial political
episodes of recent times. Just who is Jeremy Heywood?
The Grexit that
Could Actually Happen
– PIIE
Time for a new
Lamfalussy moment
– ECB
Speech
by Benoît Cœuré, Member of the Executive Board of the ECB
European Parliament
plenary debate on the ECB Annual Report for 2014 – ECB
Introductory
statement by Mario Draghi, President of the ECB
The EU and David Cameron: We need to talk about
Brexit – Politico
Why we’re not safe from Grexit yet – Politico
Finland: Tight fiscal policy gets a qualified
approval – Danske
Bank
UNITED STATES
Chris Arnade: I
worked on Wall Street. I am skeptical Hillary Clinton will rein it in – The Guardian
OTHER
El-Erian: Market
Swings Expose Central Banks' Influence and Limits – View
/ BB
FX: easy pleasy – Nordea
As
the major central banks move below zero bound, the Fed sticks out as outlier.
Or is Fed the only central bank right - things are getting better from here?
Possibly. What is good for Fed, is good for commodity and Emerging FX.
Macro Weekly:
Welcome to wall-to-wall stress – TF
No
shortage of stress indicators * Cleveland Financial Stress Index climbs * High-yield
stress rules the direction of the market * Economic data are going from bad to
worse relative to expectations * EURUSD risk reversals are now favoring calls
(upside) * Marginal cost of capital in the G-3 is testing 2015 lows * Percentage
of NYSE-listed stocks above 200 SMAs is at 2009 and 2011 lows * Cross-asset
correlation remains elevated and concerning
New Month, Same
Drivers –
Marc Chandler
Commodity Price
Shocks and Financial Sector Fragility – IMF
FAQ: The Why and What For of BOJ's Negative
Interest Rates
– Marc
Chandler
Bank
of Japan warms up the potato – JP
Koning
Noah Smith: Japan's
Experiment With Rates of Less Than Zero – View
/ BB
OFF-TOPIC
Chris Cox wants to mess
with Facebook’s secret sauce.
REGULARS
Morning MoneyBeat Asia – WSJ
Going Negative a Positive, for Now
Morning MoneyBeat US – WSJ
Rough January Signals Challenges for
Stocks Ahead
Danske Daily – Danske
Bank
Euro rates update – Nordea
Eye-Opener – Nordea
Chinese data disappoints * Crude oil
off Friday’s highs but still holding levels above $35 * Action packed calendar:
ISM and Fed speaker later today, US job report Friday
Morning Markets – TF
The Bank of Japan's surprise
interest rate cut into negative territory on Friday boosted sentiment across
the Asia-Pacific region with shares rising in Tokyo Seoul and Sydney on Monday
though Chinese stocks fell as manufacturing data from China remained weak. The
generally positive Asian session to start the month followed a robust close for
US stocks at the end of last week to cap a miserable January.
Daily FX Comment –
Marc
Chandler
Dollar Mixed to Start the Week
Daily Shot – TF
With the Bank of Japan
rate cut the country's 5-year yield moves deeper into negative territory.
According to JPMorgan the total balance of government bonds with negative
yields hit $5.5 trillion after the BOJ action on Friday. Incredible.
Matt Levine’s Money Stuff
– View
/ BB
Blockchains, Ponzis and
Robot Panic
Daily Press Summary – Open
Europe
Hopes of deal at
February summit kept alive as UK and EU officials enter ‘crucial’ 24hr talks * Polls
show mixed picture on EU referendum outcome * Merkel expects refugees to return
home after conflict subsides * The Times: EU considering plans to prosecute
charities and tourists who help migrants arriving in Greece * Greek government
caught between creditors and domestic opposition on pension reform * ECB
purchases fail to revive asset backed securities market in the Eurozone * EU
considers new rules on banks' holdings of sovereign debt * US and EU scrambling
to reach new deal on data sharing and privacy * US hits out at Commission for
targeting US firms in tax probes * Commission imposes duties on Chinese steel
though industry sees them as too low
Brussels Playbook – Politico
UK deal delay — Renzi
runaround — Polish intrigue
US Open – ZH
Rally Hobbled As Ugly China Reality
Replaces Japan NIRP Euphoria; Oil Rebound Fizzles
Frontrunning – ZH
The market is now
pricing almost nothing from the Fed in 2016 after recent market turmoil and a
cautious FOMC statement last week meaning significant surprise if US data comes
in stronger than expected.
Dovish tones from the
Central Banks in Japan and the Eurozone have decreased the likelihood for a
series of US rate hikes and this in turn is positive for equities.
FINLAND & FINNISH
Kuinka
huolissaan Fed on taloustilanteesta? Fischer avaa Fedin ajatusmaailmaa * USA:n
teollisuuden luottamus jatkaa laskussa * Kiinan teollisuuden
ostopäällikköindeksit edelleen vaisuja
Japanin
keskuspankki tekee kuin EKP ja painaa talletuskorkonsa negatiiviseksi.
Miinuskorko on valuuttasodan uusi voimakeino, mutta se on silti riskipitoinen
rahakoe eikä talouden luotettavaa teholääkettä. Se voi panna rahaolot sekaisin.
Tanska ja Euro – Roger Wessman