ECB meeting
burned the EURUSD. Friday’s close will set the tone for the next week, so it
will be an interesting end to the week – even though calendar looks empty for
now. Federal Reserve's Evans gave an interview and I believe his statement on the possibility of ending QE already when unemployment is above 7% was overinterpreted - or it was just an excuse to continue selling the EURUSD. I would not be surprised if we would see a bounce on Friday. Next market-moving event will be the clarification of the Fed's QE-policy.
Päivän sitaatit
EK on mennyt ihan vammaiseksi organisaatioksi. Ongelma mun mielestä on, että siellä on Kone-yhtiöiden johdolla liikaa äänivaltaa. Nehän on kaikki eurohörhöjä ja fantsutusspedejä pahimmasta päästä. Kyllä ne varmaan firmoja osaa jotenkin hoitaa (oho, Nokia), mutta eivät tajua hevon helvettiä maailman menosta. Tai sitten tajuavat, mutta ajavat suppeasti vain työnantajan ja työnantajan omistajan asiaa. Ei siinä mitään, mutta tekevät sen muiden kustannuksella. – Anonyymi
Hesaria ei voi edes verrata Pravdaan. Kansa tiesi miten Pravdaa tulee lukea. Suurin osa sen sijaan lukee Hesaria ikäänkuin se olisi puolueeton tietoaviisi. Ja siihen sen valta perustuukin. – Anonyymi
Previously on MoreLiver’s:
Roundups &
Commentary
News – Between
The Hedges
Markets – Between
The Hedges
Recap – Global
Macro Trading
The Closer – alphaville / FT
Roundup – Kiron
Sarkar / The Big Picture
Morning
Briefing (Asia): – BNY Mellon
Europe: Closes Red For
2013, Italian Yields At 7-Week Highs – ZH
US: Another "High Volume Dip To Low Volume
Rip" Rotation – ZH
EUROPE
No change but an eventful day – Free
exchange / The Economist
European central
banks were centre stage today as they announced their monetary-policy decisions
for February. As expected neither the European Central Bank (ECB) nor the Bank
of England (BOE) made any change to interest rates, which in both cases are at
historic lows. But there were other important developments today.
BOE to Reinvest Maturing Gilts as Stimulus
Policy Sustained – BB
The Bank of
England will reinvest the first gilts to mature since it started its
asset-purchase program four years ago as it sustains stimulus for an economy in
a “slow” recovery.
The EU budget -
gifting the way to a deal – euobserver
This EU summit may see a deal on the bloc's next
budget. If so, an unofficial 'gift' list will have played a small but
significant role.
ECB MEETING
 |
| EURUSD looks interesting. |
Intro
statement to the press conference (with Q&A) – ECB
Video of Intro
statement (with Q&A) – ECB
Draghi Signals Euro
Strength May Hurt ECB’s Recovery Efforts – BB
Draghi signaled policy makers are concerned that the
euro’s strength will hamper their efforts to pull the economy out of recession.
Euro Falls Most Since
July as Draghi Warns of Slowing Inflation – BB
The euro fell the most since July against the dollar
after Draghi said the recent strength of the currency creates a concern that
inflation will slow.
ECB meeting could
mean highs are in for EURUSD – TradingFloor
John J. Hardy: The highs may be in for EURUSD after
this ECB meeting, even though Mr. Draghi left much unsaid. Firmer conviction
for a call that the highs are in would come with a close below 1.3300.
ECB policy meeting:
dovish Draghi in difficult balancing act – TradingFloor
Steen Jakobsen: Draghi was rather more dovish than most market
participants had expected, in his comments following the bank’s monetary policy
meeting on Thursday which left interest rates unchanged.
ECB afterthoughts:
verbal intervention – TradingFloor
Juhani Huopainen: Draghi was honest about
the state of the economy and in doing so expectations of a rate cut later
reemerged. By verbal intervention alone, he was able to move the EURUSD by 200
pips - though QE comments by the Fed's Evans also helped a lot.
Dublin has
secured the tacit blessing of the ECB on a deal extending the debt repayment on
its bailed-out banks, allowing it to return to markets this year.
Draghi Strikes Again:
Talk, but No Change – Marc
to Market
However, we continue to believe this decline is
corrective in nature and anticipate the resumption of the uptrend. This is the kind of pullback--more than 2%
from the high, that offers opportunities for short and medium term
participants.
Mr Draghi and the EUR – BNY
Mellon
Given the comments made in recent days by President
Hollande on the issue of exchange rates it was always likely that the issue of
a strong exchange rate was going to be raised at today’s press conference.
This is what a
currency war looks like – Wonkblog
/ WP
While no interest rate cuts or other steps to ease monetary policy seem on the horizon from the ECB, merely by acknowledging that a rising euro could dampen growth prospects, markets were assuming that this means Draghi will be open to those steps in the future if the euro rise continues.
While no interest rate cuts or other steps to ease monetary policy seem on the horizon from the ECB, merely by acknowledging that a rising euro could dampen growth prospects, markets were assuming that this means Draghi will be open to those steps in the future if the euro rise continues.
ECB masters verbal
intervention – Danske
Bank (pdf)
EUR Slumps Most Since
July – ZH
IRELAND
Ireland’s Kenny
Declares Victory as Bank Debt Accord Reached – BB
Irish Prime Minister Enda Kenny declared victory in
his fight to ease the burden of the nation’s rescue of the financial system,
boosting his bid to regain the country’s sovereignty.
Noting the detail – alphaville
/ FT
Here’s the transaction doc from the Irish ministry of
finance
They took note. – alphaville
/ FT
Preisdent ECB Mario Draghi on Thursday all but
confirmed a “deal” for Ireland to
replace the promissory notes that once backed Anglo Irish with a sovereign bond
— indicating that there was no deal per se. The ECB’s general council
unanimously took note of something which the Irish government and Irish central
bank have agreed between themselves.
Prom note payments
“gone” – alphaville
/ FT
Under the agreement reached today with the ECB, the
Promissory Notes are being exchanged for long term Irish Government bonds with
maturities of up to 40 years. The first principal payment will not now be made
until 2038 and the last payment will be made in 2053. The average maturity of
the Government bonds will be over 34 years as opposed to the 7 to 8 year
average maturity on the Promissory Notes. In effect, we have replaced a
short-term, high interest rate overdraft that had to be paid down quickly
through more expensive borrowings, with long-term, cheap, interest-only loans.
Why it matters that the Irish promissory notes
are gone – alphaville
/ FT
And why
this could well have been the best possible deal for Ireland.
UNITED STATES
Fed seen pressing on with stimulus, mindful of
risks – CNBC
Chicago
Fed's Evans sees continued bond buying, says bond buying could ease before
jobbless hits 7%. Fed Governor Stein cites risk from extended low rates
The Fed, Credit
Bubbles and Exit – CFR
Jeremy Stein’s speech
today–“Overheating in Credit Markets:
Origins, Measurement, and Policy Responses”–provides valuable insight on
the issue of credit bubbles that could result as a consequence of current
Federal Reserve policy. As such, it
speaks to the upcoming debate over the Fed’s exit strategy.
"In Feb 2013, Fed Will Buy 75% Of New 30y
Treasury Supply"
– ZH
straight
from this quarter's Treasury Borrowing Advisory Committee (i.e., Primary Dealers)
presentation to the Treasury Department
ASIA
In a
surprise announcement, BoJ Governor Shirakawa announced that he will step down
on 3/19 (a month ahead of schedule)…Abe's push for a new governor, however, is
meeting resistance from his own cabinet and financial bureaucrats, who fear
extreme measures from the central bank may trigger a damaging rise in bond
yields.
OTHER
Stress Indicators – TradingFloor
Stress Light - Is tail-risk coming back?
Let’s wait for a fall
in stocks before declaring a great rotation – alphaville
/ FT
The Citi global equities team has taken a longer-term
view and is pretty skeptical that the recent flows signal anything like a
‘great rotation’
IN FINNISH
Suursijoittaja Soros: EU on kuin
Neuvostoliitto – loppujen lopuksi koittaa tuho – TE