Markets were very weak after the bad Q3 earnings,
signaling that the QE-effect is spent, and it’s back to fundamentals for now.
Most of the reaction probably came from the bad Spanish news, and the yields on
Spanish government debt increased somewhat. Incidentally, given the worries
over the earnings, tomorrow we’ll see Q4 macro numbers from Europe and US,
and these could set the tone for the rest of the week.
Fed is probably a
non-event on Wednesday – but do notice that Draghi is visiting the lion’s den –
he’s speaking to the Germany’s
parliament, Bundestag, on the merits
of the ECB’s OMT program. He will hold a press conference after the debate, and
the market could use a word or two now. Perhaps he will provide that? Elsewhere, Canada's central bank surprised everyone and hinted that the end of easy monetary policy is going to end some day. Why? Are they worried about the house prices, or do they know something? Are they trying to do some "Chuck Norris"-monetary policy - creating growth by building up the inflation expectations?
Previously on
MoreLiver’s:
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
Tomorrow’s Tape: New Home Sales, FOMC Decision – WSJ
European Summary: European Stocks And Bonds Plunge
Most In A Month – ZH
US Summary – ZH
Reference
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
To all
intents and purposes, the UK is already out. We stayed still. Europe galloped away without us. No doubt
we can find some elegant formula to paper over the split. As my friend Daniel
Hannan puts it, we could devise a Swiss arrangement while pretending that we
are still EU members.
Draghi’s Open Checkbook May Swing Crisis-Weary
Bundestag – BB
Mario
Draghi travels to Berlin tomorrow to face the German
Bundestag and tell them why saving the euro means writing a blank check.
Eurozone wage adjustment, charted – alphaville
/ FT
includes a
link to an interesting report from Credit Suisse. You’ll have to register,
though.
Spain's central bank said Tuesday the
country's economy contracted slightly less than expected in the third quarter
but repeated a warning that tax-revenue shortfalls could cause the government
to miss its 2012 budget-deficit target.
Charts from
Bloomberg Briefs
A Spate of Recent Positive Events in the Euro
Area – PIIE
The euro
area’s efforts to stabilize its financial picture got a boost from several
developments in the last week
Full note
from Nomura
On This Date In 1929, The Black Thursday
Selling Has Begun –
Art
Cashin / ZH
S&P 500: 2012 vs 1987 – Bespoke
FOMC Preview – Marc to Market
When and if
the Fed cuts in 2013 GDP forecasts (the Bloomberg consensus is for 2% growth, which also seems
to implicitly make assumptions about the thrust of fiscal policy), it likely
announce a change in its asset purchase program. It could come as early as
December, when its forecasts are updated.
The fraught Fed-chairman choice – Free
exchange / The Economist
But still,
the election is close, and there’s a significant probability that Romney will
win. So it’s worth asking: what happens then? Romney is on the record that he
would choose a chairman constitutionally averse to punchbowls. But what would
that mean, in practice? According to Appelbaum, there are basically three names
on Romney’s list: Greg Mankiw, Glenn Hubbard, and John Taylor.
Will the stock market freak out over the fiscal
cliff? – Wonkblog
/ WP
The Bank of
America’s fund manager survey in October found that the fiscal cliff is the “#1
risk for investors (42 percent of respondents vs. 27 percent for the E.U. debt
crisis).”
With
comments from Goldman Sachs
Short-Term USD/CAD Outlook – BNY
Mellon
Following
the more-bearish-than-expected commentary from the Bank of Canada this
morning, USD/CAD looks particularly
interesting on its daily chart.
Pre-Crisis Indicators; Inflation Study;
Dangerous Bonds; Japanese Auto Exports to China; Actual China Banking and Debt
Statistics – HistorySquared
IN FINNISH
Päättäjät elävät
kuin tuhlaajapoika – Pauli
Vahtera / IL blogit
Hupsista – Kalle
Isokallio / IL blogit
Talousarvio 2012
– juuso.org