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Monday, February 8

8th Feb - Yellen's testimony this week

Previously on MoreLiver’s:

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The European Bank Selloff is Raising Some Worries About Credit RisksWSJ

Deutsche Bank to central bankers: stop easing, you are crushing usZH

After 17 Years, ECB Reveals $547 Billion in Central-Bank Assets BB

Here's What Happens to the U.K. Economy in a `Brexit' ScenarioBB
U.K. economy could experience `nasty shock,' BI economists say * Britain's EU referendum could be held as early as June

Merkel Says EU Must Take in Refugees Directly From Turkey BB
German chancellor speaks ahead of talks with Turkish leaders * Merkel renews warning that open travel in Europe is at risk

Is This The Reason For Europe's Sudden Bloodbath ZH

European Bank Bloodbath Crashes Bond, Stock MarketsZH

Euro area: GDP previewNordea
Slow growth in Q4, pick-up later still possible

Outside Manufacturing, Growth Remain Positive, But SlowThe Fat Pitch
The balance of the macro data from the past month continues to point to positive but sluggish growth. On balance, the evidence suggests the imminent onset of a recession is unlikely.

Martin Enlund: Can the Fed go NIRP?Nordea
The Fed spent almost three years planning its first rate hike. Now the talk of the town is whether the Fed will need to engage in more stimulus, and possibly follow in the footsteps of e.g. the ECB and go negative. However, just as technical and legal frictions made liftoff unusually tricky, these frictions could mean it is harder than anticipated to bring US market rates much below zero. If true, QE4 is more likely than believed - especially if you foresee a US recession (which we don't).

Martin Enlund: What if QE4?Nordea
The recent tightening of financial conditions combined with weak data has prompted growth and even US recession fears. If US growth slows enough so that Fed seeks to deliver more easing (not our main scenario), it could be that the avenue of negative rates is less open than it thinks. If true, a QE4 program would seem likely - potentially already this autumn. A QE4 program would likely trigger unwinds of most of the dis-inflationary developments seen since mid-2014.

Easing of US Recession Fears Likely Supports Dollar Marc Chandler

EM FX: devaluation and contagion risksNordea
EM currencies are suffering and pressure is building on the remaining currency pegs and managed regimes. The longer commodity prices remain at low levels, the higher the risk of devaluation among commodity producers with pegged currencies.

Here Are The Banks The Market Is Most Concerned About ZH

Global Financial System Risk Is Soaring WorldwideZH

Gundlach Calls Financial Stocks Below Crisis Prices ‘Frightening’BB

The Oil Rout’s Surprise VictimsWSJ
The epic collapse in the price of oil has crushed investors in the futures market, energy partnerships, high-yield corporate bonds and the shares of oil and gas companies.

Will Non-OPEC Oil Production Collapse In 2016?ZH

Credit, commodities and currenciesBIS
Lecture by Mr Jaime Caruana, General Manager of the BIS, at the London School of Economics and Political Science, London, 5 February 2016.

BofA: " Sense Of Calm Has Come To An Abrupt End"ZH

Morning MoneyBeat USWSJ
No Profit Relief in Sight

Danske DailyDanske Bank

Euro rates updateNordea

Dollar slightly up, oil sideways, Yellen to set the scene this week * Mixed US jobs report, Yellen to speak on Wednesday * We expect the Riksbank to cut rates by 10 bp on Thursday
USD dish of the day

Morning MarketsTF
With nothing of major importance on today's economic calendar markets will be looking ahead to Federal Reserve chair Janet Yellen's statements later in the week for clues on the pace (if any) of US interest rate normalisation.

Daily FX Comment Marc Chandler
Falling Stocks and Yields Drag Dollar Lower
Daily ShotTF
Turmoil has not stopped yet equities are widely under pressure while gold surges again. And so do chicken wings! It's Super Bowl after all.

Daily Press SummaryOpen Europe
Austrian Foreign Minister signals readiness to trigger emergency brake on EU migrants’ access to welfare * Bundesbank and Bank of France Governors call for Eurozone finance ministry * EU urges Turkey to open border to Syrians fleeing Aleppo * BoE foreign currency reserves increase in part to potential Brexit preparation * FT survey finds top 100 firms unprepared for Brexit * Portugal promises further austerity to get Commission approval of draft budget * Commission to table major tax avoidance legislation in April * EU pays for Juncker’s Brussels-Strasburg commute by private jet

Brussels PlaybookPolitico
Renzi’s next battle — Austria special treatment — Spain leans left

Futures, Global Stocks Tumble As Europe Bank, Periphery Carnage Unfolds


FX UpdateTF
Last week finished with a slight bump in Fed rate hike expectations after a jobs report suggested strong earnings growth. Fed Chair Yellen has a tall task if the market is placing hope for improved risk sentiment on her shoulders.

From the FloorTF
Market sentiment improved broadly after China's foreign-exchange reserves plunged somewhat less than feared though the $100 billion drop was formidable by any reckoning. Friday's US nonfarm payrolls were mildly hawkish for Fed policy ahead EURUSD looked to get a foothold at new levels above 1.10 and core bond yields stayed on their downward course.

USA:n työllisyysraportti herätti ristiriitaisia tunteita * Ruotsin keskuspankki laskee ohjauskorkoa * Euroalue jatkaa maltillista elpymistään