Credit markets in Europe go back into crisis mode: German bond yields collapse, Southern Europe's surge. Switzerland is not the safe haven anymore. Cyprus to open its banks tomorrow, while seasonals and macro are not good for the risk assets. ECB coming up next week, and probably will not do anything. Terrible stuff. Read the two ones marked red.
Previously on
MoreLiver’s:
Special: Bailout of Cyprus (updated)
Roundups &
Commentary
News – Between
The Hedges
Markets – Between
The Hedges
Daily Interest Rate Monitor – Global Macro Monitor
Recap – Global
Macro Trading
The Closer – alphaville / FT
Tomorrow’s Tape – WSJ
Europe: Stocks & Bonds Battered By Return Of LTRO
Stigma– ZH
US: Phrase Of The Day: "Irrational Divergences" – ZH
EUROPE
Europe: No
Need To Worry, The Fire’s Downstairs – Pawel
Morski
The EU is pretty
emphatic about what the future of bailouts looks like: No more blank cheques,
the ESM will not become a TARP, and uninsured depositors are in the firing
line, as are senior bondholders; taxpayers are not.In this both Mr Dijsselbloem
and the rest of the European authorities are in agreement…However, there are
two important problems here 1) depositors over €100,000 control enough money to
overturn the European economy if they stampede; 2) there’s – to a fairly fine
level of precision – zero evidence that the people in charge know what they’re
doing. In short, the last thing the Eurozone needs right now is uninsured
depositors thinking hard about the prudence of their investments.
The Euro Zone’s Slinky Economy – WSJ
How long Europeans
tolerate these boom-bust cycles that are exacerbated by the ECB’s inability to
respond to local factors is another matter.
Deutsche Bank: Luxembourg and Malta
should learn from Cyprus – euobserver
Luxembourg and Malta on Wednesday (27 March) rejected comparisons
between their banking sectors and Cyprus. But Deutsche Bank says they also have reason
to worry.
Propaganda, Modern Media, and the Dijssel-Bomb – WSJ
That’s why
Dijsselbloem’s comments got such a reaction. He was offering his honest
opinion. He wasn’t playing from the Bernays handbook. The eurocrats may have
tried to “walk back” the comments, but it was too late. The market heard it
clearly.
As Switzerland is getting targeted, investors move to German
bonds.
ITALY
Italian center-left
leader Pier Luigi Bersani was left with only slim hope of forming a government
after last month's deadlocked election as talks with rival party leaders ended
with a further rejection from Beppe Grillo's 5-Star Movement.
Italy's
anti-establishment 5-Star Movement on Wednesday flatly rejected overtures from
centre-left leader Pier Luigi Bersani, who is trying to muster the numbers to
form a government after last month's deadlocked general election.
Italian Bonds Yield Most Over Bunds This Year
on Senate Deadlock – BB
OTHER PIIGS
The Spanish government
said its 2012 budget deficit will be bigger than first estimated after the EU
requested changes in how tax claims are computed.
The Portuguese
government ruled out any chance of a tax on bank deposits under a bailout for Cyprus being used as a template for other euro zone
states, and said its own depositors remain confident in Portuguese banks.
It’s fair enough if Poland wants to develop closer ties to its European
neighbors. But as Paul Krugman notes, joining the euro would deprive Poland of the strategy that allowed it to weather the
recession so effectively. The key to the Polish miracle was massive currency
devaluation.
Dromeus Capital. The
name might ring a bell. It’s the fund which did its homework on underpriced
Greek assets last year, making a killing. Pretty striking, then, that they’ve
now gone cautious on Greece.
UNITED STATES
Why Fed hawks and doves are both starting to
talk about ending QE – Wonkblog
/ WP
Hawks, who want to
curtail quantitative easing programs because of the risks they create. And
doves, who see evidence that they’re working well enough at stimulating growth
that they might soon no longer be needed.
2s-10s: be vwery, vwery afwaid – markdow
The spread between the
two yields doesn’t look so good for risk taking.
OTHER
Chart o’ the Day: Can We Break the Cycle in
2013? – The
Reformed Broker
Every year so far,
post-Credit Crisis, we've played the same game this time of year - economic
momentum slows down, fears from Europe resume
and the US stock market takes a nasty tumble.
IN FINNISH
Perinteinen
kreikkalainen tragedia Kyproksella – jumalat rankaisevat heihin luottanutta – Tyhmyri
Nobelisti
tavoittelee yleisöä – Vesa
Varhee / TalSa