Most interesting development of the otherwise dull day: comments noticing that the fall in European crisis countries' bond yields has stopped - and actually slightly reversed, and CDS prices are moving up (see my chart page). The ECB's game changer is thus almost priced in, and the statement mill is bound to disappoint. Some of you have been following the "renationalization" of monetary policy within the eurozone. You might find bruegel's dataset interesting, as it shows who actually holds the bonds - and when the trends in ownership data have reversed.
Previously
on MoreLiver’s:
25.8. Weekender: Weekly Support (still updating!)
Roundups & Commentary
News – Between
The Hedges
Markets – Between
The Hedges
Recap – Global
Macro Trading
The Closer –
alphaville
/ FT
Tyler’s European Summary – ZH
European
Stocks Close Green With Credit 'Reality-Check' On Vacation
Tyler’s US Summary – ZH
Stocks
Stumble Despite AAPL's Best Efforts
Reference
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EUROPE
Introducing the Bruegel dataset of sovereign
bonds holdings (and more) – bruegel
To our knowledge, this is the first
cross-country database on sectorial bond holdings that covers almost all the
sovereign issuer of the euro area and we believe that it could therefore add a
significant value to the existing sources. (Data in Excel
format)
Draghi: Call Me Maybe – Marc to
Market
While Spanish and Italian bonds remain firm,
though without any more upside momentum, we note that the price of insurance is
beginning to rise. The 5-year credit-default
swap in Spain is just below 500 bp and is at its highest level in two weeks. Italy's 5-year CDS is near
455 bp, which is approaching a 3-week high.
European leaders are unconvinced that the Greek
government's austerity efforts will produce quick results. Greece's fate is now likely
to be decided at the EU summit in October. The country's European partners will
have to choose among a number of equally unattractive alternatives.
Judgment Day for the Eurozone – Project
Syndicate
Hans-Werner
Sinn: Nobody knows how the Constitutional Court will rule on these objections. Most observers believe that the Court is
unlikely to oppose the ESM treaty, though many expect the judges to demand
certain amendments, or to ask Germany’s president to make his signature subject to certain qualifications.
German Central Bank Opposes Euro Strategy – Spiegel
The ECB plans to resume buying the bonds of
crisis-hit countries on a large scale. Jens Weidmann, head of the German
central bank, is firmly opposed to the idea, arguing that it will lead to
inflation and lessen pressure on governments to carry out reforms. But he is
becoming increasingly isolated within the ECB and in the political world.
Merkel Pushes for Convention to Draft New EU
Treaty – Spiegel
Chancellor Angela Merkel's plans for a new
treaty governing the European Union are becoming more concrete. SPIEGEL has
learned that the German leader wants the EU to begin working on a draft this
year, with the aim of providing Brussels with greater power to
monitor budgets. But many countries are deeply opposed to the idea.
If the treaty is a simple majority rule treaty,
Germany would be at risk of being overruled by the club-med states. If the
treaty is by percentages, the club-med states would be at risk of being
dominated by what is good for Germany and France (assuming of course Germany and France can agree). No matter how a treaty is structured, some countries are
guaranteed not to like it.
CHINA
It is no wonder that Wen Jiabao said recently
that China needs measures to promote export growth. But so far the domestic market
remains skeptical that any meaningful measures will actually be implemented.
One of the most glaring, if unremarked,
oddities concerning China nowadays is how
perceptions of its leaders diverge depending on the observer. In the eyes of
the Chinese public, government officials are venal, incompetent, and interested
solely in getting lucrative appointments. But Western executives invariably
describe Chinese officials as smart, decisive, knowledgeable, and far-sighted
OTHER
The housing market and the US economy are now far
less coupled together than in the past, when strong housing markets generated
construction based growth. And just as demographics more than the economy now
drive improved demand for homes, a better housing market will not have the same
positive impact on the economy as it did before the financial crisis.
What's Priced In? – ZH
Citi: traders 'expect' the US, Europe, and Canada
all to be tightening (raising rates) within 18 months, while expectations are
for Australia (and the rest of the China-reliant nations across Asia) to see
notable easing in that period - and already priced in.
Bernanke-Draghi: Jackson Hole vs. Leen’s Lodge – Kotok
/ The Big Picture
Foreign markets are watching China’s weakness. The
second largest economy in the world is struggling with serious questions about
its regrowth. In Europe, growth rates are not expected to improve even if the ECB liquidity
infusion occurs. In the US, the slow-growth
approach and fiscal-cliff uncertainties of an unclear election outcome impede
an economy that is struggling under the burden of a large negative output gap…
IN FINNISH
Suomi pulitti
ennätyspotin EU:lle – ”Salattiin” – US
Ennätysmaksun syy
paljastui: Suomi maksaa muiden helpotuksia – US
Soini:
Rahamarkkinoille pitäisi palauttaa oikeus epäonnistua – TE
Kuluttajista
talouskasvun vetureita – turha toivo – TalSa
Teollisuuden ja
kuluttajien luottamus ei horjunut elokuussa – euroetana