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Tuesday, May 24

24th May - EUR weakens

Previously on MoreLiver’s:

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Brexit may be the best answer to a dying Eurozone The Guardian
Is the Eurozone dying? Simon Wren-Lewis

The German current account surplus requires deficits elsewhere Edward Harrison

Where on earth is growth in Greece going to come from? Frances Coppola

Financial Stability ReviewECB
Systemic stress contained despite bouts of global turbulenceECB

Fed rhetoric boosts US dollar, critical risks loomTF
USD boosted by Fed policymakers' message that summer hike distinctly possible * Blast of Fed rhetoric last week appeared to be coordinated message * Recent scepticism about further Fed hikes stemmed from dovish March FOMC * Next hike looks like a done deal in June or July if the US data permit * Fed now must decide if US economy sufficiently robust for another couple of hikes * That decision comes against backdrop of big uncertainty in bizarre US election * Fed is in tricky spot also as to effects of its actions on global economy * For now Fed is putting on blinders and declaring total dependency on US data

Signals from the U.S. Yield Curve: World Can’t Handle Fed Rate HikesWSJ

Is the Fed Stuck in a ‘Not So Merry-Go-Round?’BB
A lack of policy-driven stock moves.

Fiscal Buffers, Private Debt, and Stagnation: The Good, the Bad and the UglyIMF

The False Promise of Negative Interest RatesProject Syndicate
Negative interest rates are the latest in a series of fruitless efforts to revive post-crash economies using monetary policy. Such efforts amount to a distraction from a fundamental truth: The only way to ensure that “new money” is put into circulation is to have the government spend it.

Helicopter money: The illusion of a free lunchvox
Realising the benefits that its proponents claim exist would require giving up on interest rate policy forever.

Does Q1 mark start of upward earnings revisions?Pictet
The first quarter results season is almost over, and has been marked by positive surprises from Europe and, less so, the US, while Japanese earnings appear to have suffered from the strength of the yen.

57% of China AAA Bond Issuers Have Junk-Like RisksBB
‘Massive Bailout’ Needed in China, Banking Analyst Chu SaysBB

Martin Wolf: Here is how populism can be defeatedFT
There is a widespread belief that the system is being exploited by disreputable insiders

Fixed Income Markets Outlook (Q2 2016)Daiwa

Jan von Gerich: Bonds: Repricing of the Fed outlook not completeNordea
Recent hawkish comments from several Fed members have caused financial markets to re-estimate the pricing of rate hikes. If the Fed really wants to keep June a real possibility, market pricing needs to shift further. The Fed outlook leaves bonds vulnerable to short-term selling pressure.

Danske DailyDanske Bank

Euro rates updateNordea

Caution prevails, USD and JPY gainers, German numbers in focus * Today German GDP and Swedish labour market data * German GDP numbers will drive yields * JPY strengthened by trade surplus

Morning MarketsTF
Gloom prevailed across much of Asia today and Europe looks set to follow through in similar vein. In Japan the yen resumed its rise against the US dollar fuelling negative sentiment and driving the Nikkei 225 into the red while commodities turned tail on recent gains.

Euro wrap-up – Daiwa

Daily Market Comment Marc Chandler
Dollar Regains Momentum, Sterling Resists

Daily ShotTF
Emerging markets globally are feeling increasingly under pressure. Besides the strong US dollar some are afflicted by political worries others by retreating investor confidence and others by materials shortages. But one thing they all share is worringly high debt-to-GDP ratios.

Daily Press SummaryOpen Europe
Boris Johnson dismisses Treasury report warning of short-term economic shock from Brexit as “a hoax” as new poll suggests growing support for Remain * Visa-free travel for Turks likely off the table this summer, Merkel warns * Far right narrowly defeated in Austria’s presidential election * Eurogroup set to unblock more aid for Greece, but agreement on debt relief unlikely * European Commission softens tone in rule of law dispute with Poland * Investors becoming wary of UK and Europe * New poll: Merkel’s CDU/CSU down almost nine points since 2013 federal election victory * ‘Missing’ EU graduates leave £89m in unpaid fees

Brussels PlaybookPolitico
Austrian takeaways — The Angie and Erdoğan show

Stronger Dollar Sends Futures Higher, Oil Lower, Asian Stocks To Two Month Lows


FX UpdateTF
USD continues its march higher particularly against the riskier currencies as the Fed continues to deliver hawkish comments. EURUSD focus shifts down to 1.1100 and even 1.1000 though US data catalysts are soon needed to boost the greenback further from here.

From the FloorTF
Japan has laid down its marker for yen intervention European banks continue to feel the heat and there's a nasty Brent long position building that could spell trouble.0

Päätös Kreikan velkahelpotuksesta voi venyä vuoteen 2022 * Fedin Bullard puolsi puheessaan koronnostoa * Jeni oli myötätuulessa *​ Ruotsista saadaan tänään myönteisiä työllisyyslukuja