29th May - Italian crisis escalates + charts

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EUROPE

European end game – Kevin Muir

The ECB’s balance sheet expansion has put Germany in an extremely difficult place. They cannot afford to cut back on the expansion for fear of another Euro-crisis, yet the more QE they do, they more Germany is on the hook. I hate to break it to Germany, but it’s even worse than it looks.

Merkel’s Comeuppance is Europe’s and the World’s Misfortune – Project Syndicate

Yanis Varoufakis: No one who was paying attention to Greece's predicament three years ago should be surprised by the position that German Chancellor Angela Merkel and Europe find themselves in today. But only a dangerous fool would celebrate.

  GEORGE SOROS
Soros Sees New Global Financial Crisis Brewing, EU Under Threat – BB

George Soros: How to Save Europe – Project Syndicate

There is no longer any point in ignoring the reality that a number of European Union member countries have explicitly rejected the EU’s goal of “ever closer union.” Instead of a “multi-speed Europe,” where all members are still heading toward the same destination, the goal should be a “multi-track Europe” that offers member states a wider variety of choices.

EU Must Reinvent Itself So That U.K. Wants to Rejoin, Soros Says – BB

Soros predicts 'five years' of Brexit divorce proceedings – New Indian Express

Soros: ‘The European Union is in an existential crisis’ – MarketWatch

  ITALY
Italian bonds suffer rout on political turmoil – FT

Investors fear fresh elections might give more eurosceptic mandate to populist parties

Tony Barber: Italian deadlock sets stage for fierce battle over the EU – FT

Populists will fight a snap election on the choice between local control and the ECB

Editorial: Italy's Looming Constitutional Crisis – BB

The populist coalition is pushing the country, and the euro zone, to the brink.

Bank of Italy warns Rome is close to losing ‘asset of trust’ – FT

Remarks by Ignazio Visco come as sell-off in Italian sovereign bonds intensifies

Europe Has A Big Problem – GMM

Italian risks recede... but only temporarily – Danske Bank

Italy: Last minute showdown – ING

The attempt to form a government backed by the Five Star Movement (5SM) and the Northern League failed on Sunday, when a final clash with President Sergio Mattarella as to the potential finance minister caused PM-designate Giuseppe Conte to hand back his mandate. A “neutral” government driving Italy to new elections looms

Leonid Bershidsky: No, Italy Isn’t a Victim of the Euro – BB

The common currency’s proponents have a strong case, they just need to make it more convincingly.

The ECB Fiddles as Rome Burns – BB

How to stop the Italian crisis turning into a full-blown conflagration.

League, Five Star Had Euro Exit Plan, Italy's Democrats Say – BB

League’s Giorgetti says ‘option never went into contract’ * Populist ministerial pick spoke of plan for euro exit in 2015

Next Italian elections could be a referendum on democracy itself – The Spectator

Italians could see the next elections as the last chance to tell Brussels that they do not want to go on with the status quo.

Ferdinando Giugliano: Italy’s Nightmare Has No End In Sight – BB

Unless the populists campaign on exiting the euro, a new election will change nothing.

Europe's soft coup d'etat in Italy is a watershed moment – The Telegraph

President Sergio Mattarella has asserted the extraordinary precedent that no political movement or constellation of parties can ever take power if they challenge the orthodoxy of monetary union. 

Martin Sandbu: Italy’s new technocrat should find his inner populist – FT

Carlo Cottarelli could co-opt the Eurosceptics by adopting some of their policies

Bill Emmott: Driving Italy out of the euro makes no sense at all – FT

Another election should focus on economic stagnation, not the currency issue

What could an Italy rescue look like? – ABN AMRO

Some possible scenarios for the election and post-election period – Reuters

Italy banker warns on political crisis as investors fear for euro – Reuters

Italy’s central bank chief warned on Tuesday that the state was “only ever a few short steps” from losing investors’ trust as markets dumped stocks and bonds, fearing repeat elections will become a de facto referendum on the country’s euro membership.

Italian Equity, Credit Protection Costs Explode, Sovereign Risk At 5Y Highs – ZH

Italians Furious After EU's Oettinger Says "Markets Will Teach Them" Not To Vote For Populists – ZH

Ashoka Mody: Italy's President Just Undermined the Euro – BB

Blocking populists will serve only to strengthen them.

Italy heading toward fresh vote later this year – Reuters

UNITED STATES

US To Impose 25% Tariff On Chinese Tech Goods – ZH

OTHER

Panic, Crisis In Italy: Dealers Pull Bids As Bonds, Stocks Crash; Euro, Deutsche Bank Tumble As Contagion Spreads – ZH

  

Central bank liquidity: Into the desert – Nordea

After years of central bank asset purchases and monetary expansion, the liquidity tide is turning. Quantitative Tightening - the reversal of QE – has the potential to carry with it significant negative market impacts. Read our in-depth report.

REGULARS

EU Open Rundown – RANsquawk

Market Briefing: Daily Markets Overview – Yardeni Research

FirstFT Daily Briefing – FT

EU budget shift, Pret to sell for £1.5bn, FT interviews Mahathir

WSJ City – WSJ

Italy’s Drama Raises Stakes for Euro, Investors Come Home to U.S. Stocks

WSJ Economics – WSJ

Is a Tight Labor Market Really, Finally Generating Higher Wages?

“Best of the web” daily charts – Lukas Daalder

Danske Daily – Danske Bank

Daily Market Comment – Marc Chandler

Dollar and Yen Surge

Brussels Playbook – Politico

Far-right Champagne guzzlers — Italian opera — Budget week

Five Things You Need to Know to Start Your Day – BB

US Open – ZH

Global Markets Descend Into Contagious Panic As Italy Implodes

Frontrunning – ZH

FINNISH

Aamukatsaus – Nordea

Päivän tärkeimmät julkaisut ovat USA:n ja Ruotsin luottamusluvut | Saksan korot laskussa, Italian korot nousussa | Julkaisimme raportin, joka käsittelee keskuspankkilikviditeettiä