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Thursday, December 15

15th Dec - EURUSD finally breaks 1.05

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View: Europe Tries to Wish Away Its Next Refugee CrisisBB
A deal with Turkey to control illegal migration is weakening. The backup plan is weaker.

Austrian proposal for an Australian migration solutionPolitico
Sebastian Kurz pushes crackdown, reflecting a political shift to the right across EU.

Member States‘ election calendar likely to take centre stage Deutsche Bank
The EU agenda 2017 will be dominated by national elections and the managment of possible fall-out from the course of European politics.

The December European Council - Another Toxic Summiteuinside
5 things to watch at the EU summitPolitico

Carney Said to Meet at ECB as Central Banks Seek Brexit HelpBB
Bank of England governor to attend ECB’s General Council * European policy makers looking for clues on economic spillover

Brexit negotiations will be led by national governmentsOpen Europe

Greece cannot be condemned to austerity for everFT
Myths about the country’s rescue package must be confronted, writes Pierre Moscovici

Macroeconomic stabilization, monetary-fiscal interactions and EMU ECB
Flash Eurozone Composite PMI – Markit
Flash Germany Composite PMI – Markit
Flash France Composite PMI – Markit
Flash PMIs: Manufacturing leading growth – Nordea
Euro-Area Maintains Momentum as Weaker Currency Helps Factories – BB

Editorial: Russia's Hacking Warrants an Independent Inquiry BB

US Economic Outlook: The Trump boom? Nordea
Our updated forecast is based on the assumption that Trumponomics will provide a net boost to growth, inflation and interest rates. But risks to the outlook are significant.

White House Economists: Four Most Stubborn Economic Challenges WSJ
Recent slowdown in productivity growth, income equality, low labor force participation rate, economic sustainability.

CPI: headline index creeps higher; core index tame – Daiwa
NAHB: Builder Confidence increased to 70 in December – Bill McBride
Flash US Manufacturing PMI – Markit

Fed Turns HawkishTim Duy
Sentiment shifting toward a modestly more hawkish stance a few months ahead of my schedule.  Policymakers finally see the light at the end of the tunnel.

FOMC reviewDaiwa
Stable economic forecasts; apparently no assumption of fiscal stimulus. Nevertheless, more tightening envisioned next year

Dollar Takes Flight on 2017 Fed Rate Path; Bonds, Gold DeclineBB

Fed lifts rates, sees faster pace of hikes in Trump's first yearReuters

Yellen Takes Post-Hike Victory Lap With Labor Market Great AgainBB
She says fiscal stimulus not needed to boost U.S. employment * Policy gradualism still in play as Fed waits Trump’s plans

Fed revises rate projections higher: ours remain unchanged Pictet

Martin Enlund’s USD: Icarus Yellen?Nordea
The Fed talking tough opens up for further near-term USD gains, but the greenback's tailwinds are still likely to slacken in Q1. Will global markets positively digest this hawkish message; or will something break? The latter is usually the case.

El-Erian: Fed Day Commentary Seen From a DistanceBB

The themes (and risks) that will shape markets in 2017BlackRock

Noah Smith: When to Send an Investing Model Into RetirementBB

What are populist policies?Simon Wren-Lewis

Barry Ritholtz: Put Forecasting in Its Final Resting PlaceBB

Forex trading ain’t what it used to beFT

IMF Paper Lays Out Framework to Assess Fiscal SpaceIMF

Flash Japan Manufacturing PMI – Markit

Danske DailyDanske Bank

Fed (over)delivers, USD and rates jump, other major central banks to stay on hold * No changes expected from Norges Bank, BoE and SNB * USD short rates jump more than 10 bp on a slightly hawkish Fed hike * The EUR/USD tests 1.05 amidst broad USD strength

Morning MarketsTF 
The Fed's rate hike decision may have been expected but it was the three-hikes plan for 2017 that really sent shockwaves across markets. Dollar has blasted its way upwards leaving carnage in its wake.

Euro wrap-upDaiwa

Daily Market CommentMarc Chandler
Greenback Extends Gains on Back of Fed

Daily Market CommentMacro Man

Daily Press SummaryOpen Europe

Brussels PlaybookPolitico

Dollar Surges, Yields Soar, Euro Tumbles To 13 Year Low As Markets React To Hawkish Fed


FX UpdateTF
The FOMC delivered a relatively hawkish jolt to the market yesterday as the Fed adjusted its rate forecasts for the near term higher. But it was clear in the Yellen press conference that the Fed is very uncertain of its path forward admitting that visibility (does it ever have visibility?) is clouded by the unknowable fiscal outlook but clearly playing defence in case Trump brings home the fiscal bacon.

Fed toimii - muut odottavat * Emme odota Ison-Britannian, Norjan ja Sveitsin keskuspankeilta toimia tämän päiväisissä kokouksissa * Euroalueen joulukuun alustavat ostopäällikköindeksit hienoisessa nousussa * USA:n inflaation odotetaan kiihtyneen marraskuussa

Euro ei pelastu pankkiunionilla ja rahastoilla – Eurothinktank

Eurojohtajat: pankkiunioni pelastaa – EuroThinktank: ei pelasta Suomen Uutiset