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Tuesday, March 15

15th Mar - Lousy US retail sales, Fed tomorrow

Previously on MoreLiver’s:

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Editorial: Europe Should Stand With MerkelView / BB

AfD had a great night, but Merkel doesn’t need to panic just yetOpen Europe
Politics is fracturing in major European countries - that doesn't mean the establishment is about to fall. Open Europe's Pawel Swidlicki analyses what the electoral gains of Germany's AfD mean in the German political context.

JPM on ECB’s package: “solid, but underwhelming”ZH

Repo Markets Show Why Draghi May Be AfraidWSJ
Going further subzero could widen the rift in the eurozone's fragmented financial system

Another Look at the ECB's ActionsMarc Chandler

Stanley Fischer and Lael Brainard Are Battling for Yellen’s SoulBB
Inflationary risks vs. financial market turmoil.

5 Things to Watch at the Fed MeetingWSJ

A post-FOMC market blastoff, but in which direction?Cam Hui

Retail Sales decreased 0.1% in February – Bill McBride
Weak U.S. retail sales highlight risks to economic outlook – Reuters
Retail Sales in U.S. Decline After January Revised Down – BB
Disappointing retail sales report – Pictet

Majors & Scandies: March 2016 FX forecastNordea
Our global scenario remains largely intact; as we think developed markets will continue to perform decently despite headwinds from emerging markets. As a result, our FX forecasts see only small revisions. We have postponed the bottom in EUR/USD to next year, in part reflecting a lack of ECB eagerness to undermine the EUR. We also predict less GBP gains, reflecting a less hawkish BoE forecast

EM FX: March 2016 financial forecastsNordea
EM FX has continued to improve since our latest financial forecast update and our EM10FX spot index is now up more than 2% on the year. We stick to our forecast that the worst weakening is behind us, that the trend in the first half of 2016 will be more sideways and that most EM currencies will strengthen towards more fundamental equilibrium levels from the second half of this year.

China Watch – Soft but bumpy landing to continueABN AMRO
No major surprises from annual National People’s Congress meeting. Target range of 6.5-7% adopted, we expect growth to slow to 6.5% in 2016. Prudent fiscal and monetary stimulus continues, more supply-side reforms. Weak activity data in January-February biased by Lunar New Year effects. Trade data weak but also distorted, while pace of capital outflows has eased. However, high and still rising overall debt levels one of the key risks. Risks and complex policy dilemmas characterise China’s bumpy transition.

BoJ: holding fire for nowNordea
As expected, no monetary policy change in Japan today. The BoJ has likely adopted a wait-and-see approach for now. The future decisions will be based on external risks from particularly China. We expect continued uncertainties around the Chinese currency to exert some downward risks to the BoJ's inflation and growth outlook, and hence push them to cut rates again in June and H2 this year.

BoJ Holds Fire on Stimulus, Negative Rate UnchangedBB

Danske DailyDanske Bank

Euro rates updateNordea

New financial forecasts; slightly weaker sentiment; focus is turning to the Fed * Swedish CPIF seen slightly above Riksbank’s forecast in February * Bond yields falling again * JPY and USD in demand

Morning MarketsTF
It was a gloomy day in Asia on Tuesday. The Bank of Japan kept interest rates on hold as expected but painted a bleak picture of the outlook for the Japanese economy. Stocks headed south in Tokyo Seoul and Hong Kong. Shares fell in Shanghai too before rebounding. In forex markets the Australian dollar lost ground after the RBA released dovish minutes from its March meeting. The yen edged higher after the BoJ kept rates steady. And the yuan hit a high for the year after the PBoC raised its daily reference rate.

Daily Market CommentMarc Chandler
Dollar and Yen Firmer

Daily Market CommentMacro Man
The greatest trick the Devil ever pulled was convincing the world he didn't exist

Daily ShotTF
Egypt has devalued its pound amid a shortage of US dollars the Russian rouble rose on news that Putin would pull Russian forces out of Syria and the USD looks ready to rip higher as the rate differential diverges from the dollar index.

Matt Levine’s Money StuffView / BB

Daily Press SummaryOpen Europe
New ORB poll puts Leave ahead as CBI members back EU membership * EU-Turkey migrant deal in trouble ahead of European leaders’ summit * Putin orders Russian forces to pull out of Syria * US General says Brexit could threaten NATO alliance * Majority of German businesses unsatisfied with Government’s migration policies * French government waters down labour reform bill following widespread protests

Brussels PlaybookPolitico
German power shift — Washington-Warsaw split — Farmers parade

US Open ZH
Bear Market Rally Fizzles: Global Stocks Down On BOJ Disappointment; Oil Slides For 2nd Day


FX UpdateTF
The JPY defaults to the strong side as risk appetite slides and the BoJ passed on new policy moves. The focus now swings to tomorrow’s FOMC meeting where the market may be underestimating the potential for a hawkish Fed.

From the FloorTF
Last night's Bank of Japan meeting was something of a non-event with no interest rate or policy shifts and only a cautious downgrade in terms of outlook. Stateside however today's FOMC meeting could be a different story as improving data attract policy hawks.

Irlannin ihme * Japanin rahapolitiikka pysyi ennallaan * Euroalueen teollisuustuotanto kasvoi alkuvuonna vahvasti – Suomi jäi porukan hännille * Tervetuloa Nordea Economic Outlook –webinaariin