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Friday, March 18

18th Mar - EU and Turkey

Previously on MoreLiver’s:

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Euro area Outlook: Moderate recovery, plenty of risksNordea
We expect growth to continue at roughly the recent moderate pace, with private consumption as the main driver. High debt and unemployment continue to hold growth back while low inflation will allow the ECB to keep a heavy foot on the accelerator. Downside risks range from the external environment (including a possible Brexit) to domestic issues like sentiment being hit by political turbulence.

EU ready to present refugee plan to Turkey – Politico
How legal issues threaten Turkey refugee deal – Politico
EU Risks Showdown With Turkey Over Halting Flow of Refugees – BB
Turkey demands EU open new membership ‘chapters’ – Politico

ECB’s very attractive TLTRO II loansDanske Bank

Bonds: Race against the ECBNordea
The ECB’s expanded stimulus measures will only intensify the race on who will find the bonds with pick-up, before the ECB tries to take it all away. Euro-area government bond spreads are set to return to last year’s lows, leaving bonds still with performance potential from current levels. Irish, Spanish and Italian bonds are likely to be among the best performers.

Euro area: Cash hoarding?Nordea
Along the decreasing and even negative deposit rates, an active discussion has started whether companies, households and even banks are already hoarding banknotes under the mattress. What does the available data say about this?

Euro Corporate Watch – How much will the ECB buy?ABN AMRO
We estimate the ECB’s CSPP programme will reach around EUR 130bn or EUR 10bn per month * For the smaller universe of iBoxx Non-financials the ECB could buy around EUR 80bn or EUR 6bn per month in the secondary and primary market combined * We think this rally still has some legs and spreads could tighten another 10-15 bps before June

US Outlook: Fed to reach both its targets in 2016 Nordea
Despite a dreary start to 2016, the US economy is still likely to reach full employment by late summer this year. By autumn also the Fed’s 2% inflation target is likely to be reached. We therefore remain confident that the Fed will continue to hike rates this year. US secular stagnation has become more of a concern. An inflation-induced repricing of Fed monetary policy expectations is a key domestic risk. Also the US presidential election implies downside risks to the economic outlook

Danske DailyDanske Bank

Euro rates updateNordea

ECB continues to push yields lower, FOMC weakens the USD, BoE and SNB on hold * Could 0% rates become a reality for Norway? * Dollar weakening to levels only observed prior to the December rate hike * 30-year bund yield drops massively

Morning MarketsTF
US oil benchmark has returned to the heady heights of the $40/barrel plus zone on the back of the weak dollar. Japanese exporters meanwhile are crying foul and the Bank of Japan might be tempted to sharpen its axe.

Daily Market Comment Marc Chandler
Dollar Trims Losses Ahead of the Weekend

Daily Market CommentMacro Man

Daily Press SummaryOpen Europe
EU leaders agree to submit watered-down offer to Turkey * EU leaders welcome forthcoming Commission plan on VAT flexibility which paves the way for scrapping of ‘tampon tax’ * European Court of Auditors: EU spending on managing external migration “struggling to demonstrate its effectiveness” * Bank of England warns EU referendum uncertainty could delay investment decisions

Brussels PlaybookPolitico
Leaders agree Turkey deal — Saint Mario — Next Door Marine

On Opex Day, It's All About The Dollar: Futures, Oil Levitate As USD Weakness Persists


FX UpdateTF
The weakening of the US dollar on the back of the dovish FOMC shocker on Wednesday stalled late yesterday and in the Asian session overnight. Looking forward event risks are few and far between until the week after next.

From the FloorTF
USD gold and oil are heading into different directions these days and one should thoroughly investigate interdependencies before getting invested.

Kuka pelkää globalisaatiota? * Fedin kyyhkymäinen kokous painoi dollaria edelleen * Korkoleikkuri heilui Norjan keskuspankissa * Venäjän keskuspankilta on luvassa kevennystä

Saksasta mallia työmarkkinoilleRoger Wessman