Given the negativity around the fiscal cliff and bad macro, some lip service will be paid by the central bankers. Especially the Bank of England could "surprise" by continuing with their QE program as they were - even given the better-than-expected GDP numbers. ECB has not much room to do anything - except a surprise rate cut or stating something on Greece. But I don't think they will say anything on Greece ahead of the Greek votes, the looming Eurogroup meeting and the decision to either continue muddle-through or halt the bailout packages. Even hinting that the ECB is taking the initiative from the hands of the paralyzed politicians would be a "game changer" at this point.
Previously on MoreLiver’s:
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| Chinese corporate earnings suck. |
Roundups
News
roundup – Between
The Hedges
The 6am Cut
London – alphaville
/ FT
Emerging
Markets Headlines – beyondbrics
/ FT
Reference
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
Economic
Calendar – Forexpros
MORNING BRIEFINGS
Can GBP derive support from its
fundamentals? Probably not, but this is no barrier to success
3 Numbers to Watch: BoE & ECB meetings; US
jobless claims – Saxo
Bank
The Bank of
England and the European Central Bank are set to vote on interest rates today,
with little change expected from either central bank. US jobless claims are
also expected to stay level, as businesses slowed hiring ahead of the US election.
With the US election concluded, we were back on
data-watch in Asia. The Australian employment report
was a surprise to the upside with a solid 10,700 jobs added in October. Incontrast
New Zealand's unemployment rate hit its highest since 1999.
Market Preview - Eyes on ECB and BoE monetary
policy meetings – Saxo
Bank
European
markets are expected to open stronger Thursday. The Greek Parliament passed the
latest round of austerity measures by a thin majority. Markets await the
outcome of the ECB and the BoE monetary policy meetings later in the day.
Danske Daily – Danske
Bank (pdf)
Financial
markets scale back on risk as the fiscal cliff is looming. Focus today on BoE
and ECB meetings.
Aamukatsaus – Nordea (pdf)
Kreikka hyväksyi säästötoimet – katseet viikonlopun
budjettiäänestyksessä * Kiinassa vaihtuu valta * EURUSD alimmilleen kolmeen
viikkoon, öljyn hinnan pudotus vahvinta koko vuoteen
Aamukatsaus – Tapiola
(pdf)
Osakemarkkinat laskivat eilen voimakkaasti, kun maan
vaalitulous päätyi kongressin vallan jakoon pääpuoluiden välillä. Poliitikoilla
2 kuukautta aikaa sopia $600 mrd. leikkausten lykkäyksestä. Markkinan
suunta: Osakemarkkina voimakkaaseen
laskuun. Vuodenvaihteen valtion budjetin leikkaukset huolestuttavat
pattitilanteeseen päättyneen USA:n vaalien jälkeen. Osakefutuurit tanakasti
plussalla, indikoiden nousuavausta. 3Q12-tuloksia aamulla: Hyvät tulokset:
Aktia (pos. tulosvaroitus annettu jo 15.10). Neutraalit tulokset: Elecster,
Talvivaara, Wulff-Group. Heikot tulokset: Tiimari (absoluuttisesti heikko
tulos).
Markkinakalenteri – Nordnet
Markkinakalenteri – Taloussanomat
Draghi still waiting for Rajoy – Danske Bank (pdf)
No action
expected. Also a good review of measures left in the toolbox of the ECB.
ECB Preview: Watch Greece and Spain – Marc
to Market
The focus,
as is often the case, will be on the press conference. Here two countries will
likely dominate the discussion Greece and Spain.
ECB in wait-and-see mode – Nordea
The outlook
has not changed and hence new easing measures are not justified at this point.
If anything, the ECB could be considering new measures to improve monetary
transmission in the periphery, eg reducing haircuts. We view the event as
market neutral.
UNITED STATES
Tail risks lurk in the shadows. Fiscal cliff
is out in the open.
– Sober
Look
The US fiscal cliff is clearly on people's
minds and is quickly becoming the dominant concern in the financial community.
If this survey were conducted today, the percentage of participants who would
view the upcoming budget cuts and tax increases as the main risk to their
portfolios would increase sharply. In fact, based on Google Trends, the
public's concerns about the US fiscal cliff have spiked recently.
On Long-Term Fiscal Probity? Or Another 'Quick
Fix'... – ZH
UBS believes that if the US economy dips into recession next
year, operating earnings—which are near peak levels—could easily plunge by a
fifth.
ASIA
Key points from Hu Jintao’s address – The
World / FT
Here’s a
rundown of 8 key themes from his address likely to shape the priorities for China’s next rulers, who will be unveiled
next week.
Warns of 'potential dangers' as he opens 18th
Communist Party Congress – The
Telegraph
China’s outgoing President Hu Jintao warning
that senior leaders had to be wary of “potential dangers” and avoid “arrogance
and impetuosity” if the “great banner of socialism” was to continue flying.
Chinese corporate earnings were still falling
in third quarter – ASA
…but is the
end of the decline in sight?
OTHER
Event Risk: The Spring Begins Uncoiling – Marc
to Market
A
contradiction between the significant event risk here in Q4 and the low implied
volatility in the capital markets, in particular the S&P 500, the euro and
yen at the start of the quarter. We
expected the contradiction to be resolved in the favor of greater volatility.
Työeläkeyhtiöiden
ratkaistava liikaa perittyjen eläkemaksujen palautus – EK