Thought of the Day: OMT-ambiquity: A credible but useful (moral hazard-wise) backstop cannot
be unconditional, but it cannot be strictly conditional either. The only way
not to have holes in your plans is not to have a plan. In a way, everyone knows
what the OMT is - but no-one can explain it.
What a week: FED on
Tue/Wed, ECB on Thu, US payrolls on Fri – and plenty of other numbers
as well. Great expectations are often met with little. This could be such a
week. The Fed will probably note and promise to monitor the weakness, as they’re
already “all-in”. The ECB knows that a rate cut would not help much, and even
if they would do that, the markets would quickly realize that it will not help
much.
I hope that they would start some sort of regional unconventional
measures to ease the tight credit conditions in “everywhere but Germany and few other countries”, but politically and
technically we’re probably not yet there. Germany’s elections are coming up and the political
leaders and bureaucrats have just hinted at easing up on austerity. Europe’s solutions always come in bits and pieces –
because they lack the courage to push against the envelope. In a way it is
funny how Hitler (inflation created the monster!) is still destroying the lives
of the European people.
Previously on MoreLiver’s:
Current Specials:
Special: US Q1-2013 GDP (new)
Special:
Reinhart & Rogoff Debacle (updated)
Roundups
News roundup – Between The
Hedges
The 6am Cut London – alphaville
/ FT
Emerging Markets
Headlines – beyondbrics / FT
Morning MoneyBeat Europe
– WSJ
MORNING BRIEFINGS
Today’s Economic
Sentiment Indicator report will provide more context for evaluating the mood
across the Eurozone. Later, updates arrive on US personal income and spending
and the Dallas Fed Index.
Market Preview: German CPI and EU confidence
indices in spotlight – TradingFloor
European markets are
expected to open mostly higher Monday amid easing concerns in the Eurozone
after Italy formed a coalition government over the weekend. Investors are keeping a
close eye on German CPI and Eurozone sentiment indices due later today
Danske Daily – Danske
Bank (pdf)
In Italy a broad
three-party coalition was sworn in on Sunday. Bank of Cyprus has converted
37.5% of deposits above EUR 100,000 into equity. In Iceland the two parties
that governed when the crisis hit have regained majority. Market movers today: Riksbank
minutes, German inflation
Aamukatsaus – Nordea
Euroalueen
luottojen lasku tasaantumassa * EKP:lla paineita laskea ohjauskorkoa * USA:n
talouskasvu jäi hieman odotuksia heikommaksi
Aamukatsaus – Tapiola (pdf)
Helsingin pörssin tuloskausi on nyt edennyt
yli puolenvälin ja olemme koostaneet välitilinpäätösen tuloskauden kulusta. Tuloksissa
on nähtävissä pientä pehmeyttä, mutta ei katastrofia. Markkinan suunta: USA:n
BKT kasvu jäi hieman odotuksista, katkaisten osakemarkkinoiden nousuputken. Tällä
viikolla kalenterissa keskuspankkien korkokokoukset ja USA:n
työmarkkinaraportti. Osinkoja irti osakkeesta tänään: Atria EUR 0,22. Osakefutuurit
ylös, ennakoiden nousu avausta OMX HEX:iin. 1Q13-tuloskommentit: Pohjola,
Uponor ja Aspo klo 10, Affecto klo 12.30. 1Q13-tuloskauden ”välitilinpäätös” –
heikkoutta havaittavissa, muttei katastrofia. Suositusten seuranta: Osingot
irronneet ja tulokset pääosin takana.
EUROPE
As JPMorgan notes, the
sharp rise in unemployment we have seen since mid 2011 has led to an
acceleration in NPLs at Italian banks
Beyond Their Ken? – Fistful of Euros
Edward Hugh: 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.
UNITED STATES
FOMC Preview: Inflation Watch – Calculated
Risk
Expectations are the
FOMC will take no action at this meeting…Since the most recent meeting in
March, the incoming data has been a little weaker, so the FOMC will probably
adjust the wording of the statement.
The data seems to
indicate that polarization is definitely sharper now than in the past and is
particularly acute in the House of Representatives.
ASIA
Shifting Risks, New
Foundations for Growth (executive summary pdf)
Video: IMF APAC REO Press Conference – IMF
IMF: how to avoid the middle-income trap – beyondbrics
/ FT
With global growth
slowing again, the IMF in its latest REO has revisited an old question – are Asia’s middle-income economies stuck in a middle-income trap? Economic
history suggests that the probability of a “marked fall” in growth in
middle-income countries is 1.5 times greater than for advanced economies or for
low-income nations. But nobody’s fate is pre-determined, says the report.
OTHER
Weekend Developments: Signal and Noise – Marc
to Market
Five talking points:
1) leaked French Socialist draft document that was critical of Germany and the
UK 2) Bundesbank's letter to the German Constitutional Court objecting to the
ECB's Outright Market Transactions – no news or influence, 3) The Iceland
election 4) Formation of a new Italian government 5) An Austrian weekly claims
that national central bank estimates that to wind down a nationalized bank by
the end of this year as the EU is demanding would cost the government 14 bln
euros or ~4.5% of GDP.
FX Comment: oops…a soft patch? – Nordea
A central bank week,
full of important data from the US side. The latter showing weakness should keep
USD under pressure.
Why Inflation is not falling – Mainly
Macro
There has been
considerable interest in the recent IMF study that found that the
responsiveness of inflation to the output gap (or equivalent measure) falls at
low levels of inflation. But if the econometrics is right, what is the
explanation for this?
FINNISH
Antaako
markkinat Euroopalle työrauhan kasvulle? – Henri
Myllyniemi / US Puheenvuoro
Dramaattinen
käänne uusissa asuntolainoissa – TE
Uusien asuntolainojen määrä on kääntynyt
reippaaseen laskuun, paljastaa OP-Pohjolan maanantaina julkistama
osavuosikatsaus.