Markets continued being soft, but not dramatically so. Boring day - but we are approaching limits of the correction. Either the risk appetite shows up now - or the bad fundamentals takes the markets lower first. The Spanish 6% yields are worrying me - the eurocrisis could flare up again very quickly.
Previously on MoreLiver’s:
17.9. US Close: Realization (I really liked this)
Roundups and Commentary
News – Between
The Hedges
Markets – Between
The Hedges
Recap –
Global Macro Trading
The Closer
– alphaville / FT
Roundup – A
View From My Screens
Tyler’s US Summary – ZH
Consolidation,
Covering, Or Capitulation?
Reference
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EUROPE
The OMT and ‘limits’ – alphaville
/ FT
“We will only buy the debt with the remaining
maturity of three years and part of the conditionality will be that the
maturity structure of the debt may not change so that they (governments) cannot
put all the new debt in the short end of the market,”
Longer
feature article – ok outline of the game.
Portugal's 10Y is now 70bps higher in yield in the last two days - notably back
above an unsustainable 8% (at the same time as government revenues missed
expectations - shocker).
“Future of Europe Group” presents federal
proposals – presseurop
Ministers call for stronger EU foreign policy
chief – euobserver
USA
It already has – markets have partly priced in
the automatic cuts. But Washington's partisan deadlock causes ruinous uncertainty
Great Tips-pectations – alphaville
/ FT
US 10-year Tips breakeven rates are surging, and talk of a revival in
inflation expectations is, understandably, doing the rounds.
What do you Buy for the Country that has
Everything? – TF
Market Advisors
But QE is not a good tool for increasing final
demand. Sometime it can help, but with the current situation, I don’t think it
will do anything, at least not for domestic final demand.
QE3 and Inflation Expectations – MacroMania
good charts
US dollar during QEs – ASA
OTHER
Morgan Stanley's Adam Parker: Behavioral
Economics 101 – ZH
When will fundamentals matter again? We don’t
know. Our guess is sometime between October earnings season and right after the
US Presidential election. If not, our view that the market’s next
double-digit move is down, not up, will be wrong by year-end, and we will have
to moderate our stance or push out the timing of our expectations. We use a
framework to establish our market view. The framework says earnings will be $99
for the S&P500, not the consensus view of $116.
Yield Forecast Update - Central banks take
major steps to fight crisis – Danske
Bank (pdf)
Chinese/Japanese spat over islands escalates – Kiron
Sarkar / The Big Picture
Gold vs. Inflation – The Big Picture
As Merrill Lynch pointed out earlier this week,
“the link between inflation and gold is very limited.”
IN FINNISH
Oikeudenmukainen
talousarvio – Hannu
Visti
Jutta “posetiivarin
apina” Urpilainen kehuu esittelemäänsä budjettia “oikeudenmukaiseksi”.