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Wednesday, April 27

27th Apr - Fed slightly less dovish than expected

Previously on MoreLiver’s:

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Fighting deflation with unconventional fiscal policyvox
Such policies aim to increase growth and inflation in a budget-neutral fashion, while keeping the tax burden on households constant.

Euro area credit growth slowed in March, but Q1 very strong overallPictet
UK economy loses pace ahead of Brexit vote - Q1 GDP reviewNordea
The UK economy posted in Q1 the weakest quarterly expansion in more than three years, likely at least partly reflecting increased concerns about the outcome of the forthcoming vote on EU membership. However, we continue to expect growth to catch up in the second half of the year, assuming the UK remains part of the EU. Against this background, we continue to expect the first BoE rate hike in Q4 2016.

Can Brexit Betting Odds Tell Us Something About the Pound?WSJ
Gamblers have upped the stakes in favor of the U.K. staying in the EU, suggesting odds offered by bookies could be a better guide for investors from now on

U.K. Would Suffer Economic Hit From Brexit, OECD SaysBB
The best outcome under Brexit is worse than remaining in EU * U.K. GDP would be 5% lower by 2030 under Brexit scenario

Eurogroup and IMF Have Come Closer to Agreement on Greek Debt – euinside
Eurogroup delay on Greece may not be deathblow – Politico
Brussels Briefing: Eurogroup grope – FT
EU's Tusk urges Eurogroup to set date for Greece talks within days – Reuters

Spain to hold re-run elections – will anything change? – Open Europe

5 Things to Watch in the First-Quarter GDP ReportWSJ

The Fed Is Meeting in April to Talk About JuneBB 
Fed Policy Statement – FED
FOMC Statement Demonstrates Firm Grasp of the Obvious – Marc Chandler
Removes "Global Risk" But Keeps Monitoring "Global Developments" – ZH
Redacted Version of the April 2016 FOMC Statement – David Merkel
How the April Statement Changed from March – WSJ
Key Take Aways: "Fed Leaves Door Open For June Rate Hike" – ZH
See Markets React to the Fed in 7 Charts – WSJ

What is the BOJ Going to Do?Marc Chandler

Great Graphic: Measuring Cost of Extend and PretendMarc Chandler
Reinhart argues that the writing off of private debt accumulated during the expansion years is an integral part of resolving financial crises.    Rather than seek greater international coordination (e.g., IMF and G20) or large-scale public investment (e.g., Summers, Stiglitz, Krugman), Reinhart argues that what is ultimately holding back the a more robust recovery is the "extend and pretend" practices.

China's Plan to Clear Bad Loans Could Backfire, IMF Staff WarnBB
Converting debt to equity may keep alive `zombie' firms * Plan may create conflict of interests for bankers, report says

Australian Consumer Prices Unexpectedly FallBB
Headline CPI in deflation, annual core inflation at record low * Currency drops almost one-and-half U.S. cents after release

EM FX: Recovery in tandem with commodity prices Nordea
Emerging currencies continue to recover in tandem with commodity prices. Commodity exporters such as the RUB, the BRL and the ZAR have performed best this year against the USD, while commodity importers such as the INR, the CNY and the TRY have performed worst. The BRL is over performing as markets cheer for a new president that may not change much; the PLN is succumbing to political risks; while the RUB will continue to ignore all other factors than oil – even a potential rate cut this week.

Falling output and weaker dollar push oil to 2016 highReuters

Danske DailyDanske Bank

Euro rates updateNordea

Oil prices at 5-month high * More easing from the BoJ? * Fed to open the door for a June rate hike? * Weak data undermined the USD ahead of the Fed * GBP advances as fears of Brexit abate

Morning MarketsTF
Japan's Nikkei index was hit by ripple effects from disappointing second-quarter results from US technology giant Apple where iPhone sales dropped and topline and earnings figures missed analysts' expectations. Apple's poor results reported after the US market closed on Tuesday knocked shares in Japanese supplier companies on Wednesday. Shockingly weak CPI data from Australia hit the Aussie dollar.

Euro wrap-up Daiwa
Daily Market Comment Marc Chandler
Two Issues Loom Large Today: Soft Australia CPI and FOMC

Daily Market CommentMacro Man
Fed roulette

Daily Market CommentPolemic’s Pains
The Widow Maker.

Daily ShotTF
The great slowdown has been replaced by a great wall of stimulus from Beijing but as with all such efforts the rallies risk obscuring the need for fundamental reform.

Daily Press SummaryOpen Europe
Brexit would cost Britons a month’s salary by 2020 says OECD – while Cruz says Britain would be at “front of the line” for US-FTA after leaving * Migration underestimated by 50,000 a year * Spain set to hold re-run elections on 26 June * UK fined £650m over past decade for misspending EU funds * Commercial property companies warn of negative impact of Brexit on investment * Tsipras set to call for EU summit as Greece and creditors once again at impasse over bailout talks

Brussels PlaybookPolitico
Greece stumbles — Trump soars — Poland’s Tusk problem

Futures Ignore Apple Plunge; Oil Rises Above $45 As Fed Announcement Looms


FX UpdateTF
The Aussie was pummeled for heavy losses on a huge CPI miss that will require an RBA response. A torrid 10-ish hours await markets later today and overnight as the FOMC RBNZ and BoJ will all make public their latest policy intentions.

From the FloorTF
Surprisingly weak CPI data from Australia overnight knocked the Aussie dollar sharply lower and raised the prospect of a rate cut at the central bank's meeting next week. Asian equity markets meanwhile were rattled by weaker-than-expected results from US cellphone and computer maker Apple.

Fed pysyy tarkkailuasemissa * Realin ralli on liian railakasta * Britannian talouskasvu sinnittelee kohtuullisena kotimaisen kysynnän tuella * EKP julkaisee tiedot euroalueen luotonannon kasvusta

Ikuiset asuntolainat eivät selitä Ruotsin kasvuaRoger Wessman