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Tuesday, April 5

5th Apr - Appetite for risk gone

Previously on MoreLiver’s:

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Relief for the ECBNordea
In February, loan interest rates in the Euro area continued their declining trend after the surprising rise in January in some countries. This is a relief for the ECB which wants to see its loose monetary policy and even negative rates transmitted to the real sector.

Euro political risks to the foreABN AMRO
Greece, the IMF and Germany point the finger as WikiLeak ends in acrimony – fund suggests impasse could run to July. Meanwhile, Portugal faces a potential downgrade by the end of this month which could make its bonds ineligible for ECB purchases while Spain needs to form a government by 2 May or face new elections at the end of June which is around the time of the Brexit referendum.

Fed on hold for now – new Fed and EUR/USD callNordea
The Fed seems to have made a dovish shift to its reaction function. As a result, we have changed our Fed call, seeing now only one rate hike in 2016. However, we now expect four rate hikes in 2017, up from three in the old baseline. Our new forecast sees a steeper US yield curve later this year as markets start to price in a growing risk of Fed falling behind the curve. We have lifted the EUR/USD forecast between now and mid-2017 but keep a profile of a stronger USD down the road.

EM Traffic Light March 2016Nordea
Risk are easing, but managed regimes still at risk. The SAR flashes red for the 16th month out of the past 17, while the NGN, TWD, KZT and HKD all get a yellow light.

About the Panama Papers – Süddeutsche Zeitung
Politicians Should Keep Their Money at Home – View / BB

Danske DailyDanske Bank

Euro rates updateNordea

Low risk appetite, new Fed and EUR/USD forecast * Today focus on ISM data * Flatter Bund curve * Brexit worries weighing on the GBP

Morning MarketsTF
Asian stocks were mixed on Tuesday, and oil's slide persisted. Japanese stocks tumbled on fears that the strong yen would dent corporate earnings. But Chinese shares headed higher as trading resumed after a public holiday on Monday. And in Australia, the RBA kept the cash rate unchanged at 2.0%, as expected, but the bank's comments on the currency stoked the Aussie dollar.
Daily Market CommentMacro Man
How about a nice warm cup of...

Daily Market CommentPolemic’s Pains
An iron pyrites of market crashes.

Daily ShotTF
With risk sentiment on the wane forex traders are rushing into the Japanese yen despite central bank warnings. The resulting rally has decimated the benchmark Nikkei 225 index.

Matt Levine’s Money Stuff – View / BB

Daily Press Summary Open Europe
New poll finds support for ‘Remain’ picking up * Cameron: Brexit would entail deliberately choosing a second-rate, more restrictive trading relationship with our biggest market * New poll: Majority of French, Germans and Italians in favour of reintroducing border checks * Returns of migrants under EU-Turkey deal begin * Süddeutsche Zeitung: Failure of EU-US free trade deal is becoming a real possibility * European Commission responds to Panama papers saying there is “plenty more to come” in cracking down on tax avoidance

Brussels PlaybookPolitico
Tusk talks — Trump tanks — Panama big bang and slow burn

"Risk Off" - Global Stocks Slide As Yen Surges To 17 Month High; Bund Yields Plunge


FX UpdateTF
USDJPY continues to trade heavily with weaker risk appetite a key driver, and now we’re having a look at the lows for the cycle. Elsewhere, AUDUSD is in a key short-term pivot area after what appears to have been a half-hearted RBA reaction to a stronger AUD.

From the FloorTF
Bank of Japan governor Haruhiko Kuroda was out last night telling markets that further easing remains a distinct possibility, but this did nothing to restrain the surging yen. Thjis morning sees USDJPY plunging towards the 110.00 handle as oil prices remain soft and the Aussie vacillates on a neither here-nor-there RBA statement.

Siirtyvätkö varat patjan alle? * Nordean uusi ennuste: Fediltä luvassa vain yksi koronnosto tänä vuonna * EKP:n löysä rahapolitiikka välittyy reaalitalouteen * USA:n palvelusektorin luottamus elpyy