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Tuesday, July 12

12th Jul - UK's May, Italy's banks, IMF Art.4

Previously on MoreLiver’s:

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Spain, Portugal in line for penalties on budget deficitsPolitico

Russia Economic ReviewDaiwa

Press release: France Article IV ConsultationIMF
France Article IV ConsultationIMF
France: Selected IssuesIMF

Press release: Italy Article IV ConsultationIMF
Italy Article IV ConsultationIMF
Italy: Selected IssuesIMF

Insolvency and Enforcement Reforms in ItalyIMF
Italian banks are burdened with high levels of nonperforming loans, the cleanup of which depends in important part on the efficiency of insolvency and enforcement processes. Traditionally, these processes in Italy have taken very long, hampering the timely cleanup of balance sheets.

Cleaning-up Bank Balance SheetsIMF
This paper examines the Italian banking system’s NPL problem, which ties up capital, weighing on bank profitability and authorities’ economic reforms. It argues for a comprehensive approach, encompassing economic, supervisory, and legal measures.

Italy to face two-decade recession: IMFPolitico

IMF Warns Of "Global Contagion", Two-Decade Long RecessionZH

Saving Italy’s banksFT

BoE preview: Precautionary cut in July, more easing in August – Danske Bank
Gazing into the distance – Frances Coppola
Here’s How Much Europe Depends on the UK – John Mauldin
Carney Defends Bank of England After Attacks Over Brexit Warning – BB
Carney speaks about Brexit and BoE's response – Reuters
EU Finance Chiefs Call for Accelerated Brexit With May Ascent – BB
Paul Krugman: Still Confused About Brexit Macroeconomics – NYT

Theresa, meet Angela – Politico
Theresa May—More Merkel than Thatcher? – PIIE
6 things to expect from Theresa May’s premiership – Politico
Who is Theresa May? – FT
May Starts Work to Steady U.K. for Brexit After Promotion – BB
Theresa May triumphs – FT
What might May’s vision for Brexit look like? – Open Europe

Catching UpTim Duy
I am keeping an eye on Tarullo; he has been more public on his monetary policy views in recent months. And those views are fairly dovish. My guess is that he and other doves regret taking one for the team last December and falling in line with a rate hike. They won't go down so easily this time around.

United States: Article IV ConsultationIMF
IMF Survey: Structural Forces Weigh on Future U.S. GrowthIMF

Macro Japan: A weaker yen at any priceHandelsbanken

Danske DailyDanske Bank

May to replace Cameron, more stimulus in Japan * Expect higher Swedish inflation * Spanish and Portuguese bonds held back due to EDP * Yen continues to weaken in expectation for further stimulus

Morning Markets TF
Theresa May will become UK prime minister tomorrow and that has given markets a certainty that has restored risk appetite and a little bit of sterling pride.

Euro wrap-upDaiwa

Daily Market CommentPolemic’s Pains
Brexit bounce, nuclear CBs and new highs.

Daily Market CommentMarc Chandler
Easing Political Uncertainty Encourages Animal Spirits

Daily Press Summary Open Europe
Merkel urges Britain to “quickly clarify” relationship with the EU * May confirmed as Prime Minister in waiting after Leadsom withdraws from Tory leadership race * ‘Symbolic’ fine for breaching Eurozone deficit rules draws closer for Spain and Portugal * Renzi: Agreement with EU on Italian banks “within reach” * Pew Research poll reveals Europeans’ unease about incoming refugees and multiculturalism * Lawyers for Britain group dismiss legal argument for parliamentary vote on triggering Article 50 * Centre-left SPD biggest loser as all established German parties lose support * Juncker accepts new British Commissioner * No change in EU migration policy after Brexit vote says Commissioner

Brussels PlaybookPolitico
May day — Brexit means Brexit — China summit

US Open ZH
Global Stocks Surge On Rising Hopes Of Japan "Helicopter Money"


FX UpdateTF
The yen remains the weakest currency on the back of the global risk rally and because the market anticipates fiscal stimulus from Japan soon. But the US dollar is also suffering as the Fed is seen as sidelined for now. Top gainers in this environment are EM and commodity currencies particularly the Aussie.

From the FloorTF
Nintendo shares are flying on the back of the runaway success of its Pokemon Go mobile game but the rally may prove short-lived as expectations outstrip actual value.

EU kokoontuu päättämään Espanjan ja Portugalin sanktioista * Theresa May astuu huomenna Britannian pääministeriksi * Fedin Tarullo ja Kashkari puhuvat tänään *​ Ruotsin kesäkuun inflaatio julkaistaan tänään