The last
week in review, and next one previewed!
Previously on MoreLiver’s:
7.9. Guest: On Mario's Shock and Awe (excellent)
7.9. US Close: BigU = QE3 (payroll special)
LAST WEEK
Prices
Weekly
Scoreboard – Between
The Hedges
Weekly
Eurozone Watch – Global
Macro Monitor
Week in
Review – Global Macro Monitor
US market
portrait 2012 week 37 – Portfolio
Probe
Summary for Week ending Sep 7 – Calculated
Risk
The key event of the week was in Europe when ECB President Mario Draghi
announced the Outright Monetary Transactions (OMT). It is hard to tell how
effective these measures will be, although analysts at Nomura think the OMT
bought policymakers three months at best: "This latest round of policy
announcements could buy up to three months should countries call for help
relatively quickly and conditions attached to the bail outs are light." In the US, it was a busy week.
The employment report was weak again with only 96,000 payroll jobs added in
August, and the ISM manufacturing index suggested contraction in manufacturing
for the fourth consecutive month.
The Weekender – beyondbrics
/ FT
Succinct summation of week’s events – The
Big Picture
Podcast: MarketBeat Week (27 min) – MarketBeat
/ WSJ
The pros and cons of the jobs report, how the
Fed may respond at next week’s meeting and the steps the European Central Bank
has taken to combat the debt crisis. The crew discussed the increasingly
likelihood of QE3 and whether stocks — already at four-and-a-half year highs —
could have further room to rally. The law of diminishing returns has come into
play throughout each of the previous Fed programs, which is a concern. But as
the old Wall Street adage goes, don’t fight the Fed.
Politics this week – The Economist
Business this week – The Economist
NEXT WEEK
Schedule for Week of Sep 9 – Calculated
Risk
The key event this week is the two day FOMC
meeting on Wednesday and Thursday. There is a very strong possibility that the
Fed will provide additional accommodation...In Europe, Germany's Constitutional Court is expected to rule if the ESM is constitutional on Wednesday at 6 AM ET.
Next Week’s Tape – MarketBeat
/ WSJ
Fed Meeting, Apple Event, German Court Decision:
A Federal Reserve meeting should dominate financial coverage next week, as
market observers wait to see whether the Fed will step in with new
interventions to jumpstart the slow U.S. recovery.
S&P 500 Earnings Week Ahead – Reuters
Wall Street Week Ahead – Reuters
At the start of the historically weakest month
for equities there are plenty of reasons to believe stocks may be just about
reaching a top - at least in the short term.
Pivotal EZ
crisis court ruling (2:25)
China trade, Hong Kong leadership test
Video: US Week Ahead – Reuters
Don't bet
on support from "Super Ben"
Global Week Ahead – Nordea
(pdf)
In the US, the Fed meeting
concluding on Thursday will be the main focus. In the Euro zone, the crucial
day will be Wednesday. On that day the German constitutional court will rule on
the ESM and the fiscal pact, the Netherlands will have parliamentary elections and the European Commission will
present its banking union proposal.... On top of that, Euro-zone finance
ministers will meet on Friday, and discussions about a possible aid request
from Spain will really pick up steam.
Weekly Preview: Swiss FX Reserve Growth – BNY Mellon
We strongly suspect it indicates that there has
been no meaningful shift in the underlying forces driving the CHF (and reserve
growth). Increases in pessimism about the outlook for the Euro-area continue to
spark fresh inflows into the CHF while any easing in tensions sees mild
outflows occurring. Looking ahead to potential developments in the Euro-area
story, although we expect the Spain story to work out
well (ish), we also suspect that Greek tensions will become an increasing issue
through the remainder of the year.
Weekly Focus: ECB back as fire fighter - and it
works – Danske
Bank (pdf)
We expect the German ruling on the European
Stability Mechanism on Wednesday to attract a lot of attention. On the same day
it is election day in The Netherlands. The euro group meeting on Friday may give more insight on whether Spain is ready to ask for
help. At Thursday’s FOMC meeting, we expect rate guidance to be extended into
2015. We also think the odds are still skewed towards QE3 – but it is a very
close call.
Market
Analysis: – The Short Side of the Long
Weighing the Week Ahead: Will the Fed
Disappoint the Markets? – A
Dash of Insight
Before this week I was not expecting an
aggressive action by the Fed, but my own opinion changes with the data. The
mistake made by most is a collection of dangerous ideas -- OK for politics, but
risky for trading and investing. In the
absence of a better term, I'm going to call it the Fed Skeptic Syndrome.
FX
Positioning and Technical Outlook – Marc to Market
The Weekly T Report: Dream the Impossible
Dream? – TF
Market Advisors
From what we have seen with Greece, I think it will take
far longer to pull the plug on a country than anyone would expect. In fact, I
can’t help but think that Draghi is purposely heading down the slippery slope
to ensure that the ECB and EU integrate more rather than less. That he knows
politicians won’t like losses, and will always up the program.
Weekly Credit Update – Danske
Bank (pdf)
Draghi drags credit spreads tighter. High
primary market activity.
EMEA Weekly: Week 37 – Danske
Bank (pdf)
Turkish growth slumps. Inflation in focus
across the CEE
Emerging:
Week Ahead – beyondbrics / FT
CALENDARS
Economic
Calendar – fxstreet.com
Monthly
Economic Calendar – fxstreet.com
REFERENCE
Debt
crisis: live – The
Telegraph
Europe Crisis Tracker – WSJ
FX Options
Analytics – Saxo
Bank