Bad PMIs from Europe pushes bond yields to lows not seen since 2010 - ECB easing being priced in (both the ECB and the FED hold their meetings next week). Next key events US PMI today, Wed Ger IFO, index Thu Dijsselbloem grilled & UK Q1 GDP, Fri EZ M3, US Q1 GDP.
EURUSD looks to be on a way down, but might see a bounce before further losses.
Previously on MoreLiver’s:
Current specials:
Special: IMF / G20 / WTO Meeting (updated)
Special: Reinhart & Rogoff
Debacle (updated)
Roundups &
Commentary
Overnight: Disappointing Chinese, German PMI Data – ZH
The Lunch Wrap – alphaville
/ FT
Emerging N.Y. headlines – beyondbrics
/ FT
Daily press summary – Open Europe
Morning MoneyBeat: Trading Volume Raises Concerns – WSJ
Morning Bond Update – TradingFloor
Narrowing Spreads Fail to Lift Euro, Dollar Holds Below JPY100 – Marc
to Market
EUROPE
Talk of a ECB rate cut
is growing, euro zone policymakers at the G20 last week began to ponder
loosening up on debt-cutting in an attempt to foster some growth and Barroso
added his voice to the debate yesterday, saying the austerity drive had reached
its “natural limit”.
Mainstream opinion is
seriously considering the idea that everyone may end up better off if problem
countries simply leave the euro zone with as little fuss as possible. And once
such an exit becomes thinkable, it may well become inevitable.
Spain's economic problems now form part of such a complex web of cause and
effect, action and reaction, that it is getting increasingly difficult for
laymen, journalists and politicians alike to get to the core of what is
actually happening.
Eurozone: Guinea Pigs, PIIGS and FISH – TradingFloor
Neil Staines: There
are a number of themes at play within the Eurozone at the current juncture, all
have different connotations for their respective national prosperities and
indeed for the Eurozone as a whole. Meanwhile, growth continues to falter.
Economic Weakness Will Hit Euro – MoneyBeat
/ WSJ
Supports for the euro
are being kicked away one by one. And the single currency could soon face a
more dramatic fall as the debt crisis morphs into an economic one.
Bond yields in the eurozone are hitting lows
not seen since 2010:
Crisis, what crisis
etc – alphaville
/ FT
Search for Returns
Drives Fresh Troughs for Euro-Zone Yields – MoneyBeat
/ WSJ
Government Bonds Surge
as Italian, Irish Yields Drop to Records – BB
Deficit and debt data for 2012 – Eurostat
(pdf)
PMI
Depressing eurozone
and German prints below.
Euro zone slump moderates but German worries
appear – Reuters
A sharp drop in German
business activity overshadowed an easing downturn in France in April, surveys showed on Tuesday, raising
concerns over a further economic contraction in the euro zone.
Euro-Area April Manufacturing, Services
Contract – BB
Euro-area services and
manufacturing output contracted for a 15th month in April as the currency bloc
struggled to emerge from a recession.
European PMIs finally bad enough for ECB to
act? – TradingFloor
After the PMI numbers
in March I wrote that the numbers were not bad enough. I think today’s numbers
however fit the bill and are bad enough. These numbers might just be bad enough
to push the European Central Bank into action.
Barring further
weakness in commodity prices and the other indicators that I mentioned, the
implication is that US stock market action will be choppy because of
the uncertainty caused by commodity weakness and Earnings Season, but any
downside will be limited.
S&P 500′s Head-and-Shoulders Pattern Not a
Problem Yet – MoneyBeat
/ WSJ
ASIA
OTHER
The End of Growth? – Satyajit Das
/ EconoMonitor
Driven by massive
monetary stimulus from central banks, the performance of financial markets,
especially stocks, have decoupled from that of a moribund real economy.
Financiers assume that the strong rise in equity markets anticipates a strong
economic recovery. However, there are fundamental reasons why the world may be
entering a period of low or no growth. If that turns out to be the case, then
the optimism of financial markets may prove premature.
BizDaily: The secrets of Goldman's success – BBC
(mp3)
A rare interview with
the boss of the world's most successful - and controversial - investment bank,
Goldman Sachs.