9th May - US Close: Fed rumors, European nervousness

Previously on MoreLiver’s:

Thursday US Open

Thursday EU Open

Valuuttakriiseistä

Wednesday US Close

Weekender: Weekly Support

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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

US: QE-OFF Rumor Sends Market Turmoiling By Whopping 0.37% – ZH

EUROPE

The dramatic adjustment in eurozone trade imbalances – Gavyn Davies / FT

At the present rate of progress, it will take at least 5 more years for the competitiveness gap with Germany to be entirely closed for several economies. In the meantime, extraordinarily high rates of unemployment are likely to persist in the south, and with that will come a continuing risk that voters will revolt against the recessions which they are experiencing.

The euro crisis has turned into a fatal disaster – TradingFloor

Lars Seier Christensen's keynote speech at #FXDebates event in London.

When ideology meets economic reality (Part III) – Open Europe

Opposition to the FTT grows at the heart of Europe

Shifting Balances at the ECB – Marc to Market

Draghi indicated that the ECB was looking for ways to support lending to small and medium sized businesses, which, given the economic structure, is particularly important for Spain and Italy.  Draghi seemed to link this to discussions with national government to reanimate the ABS market, which the US did much earlier in the crisis, with reasonable success. 

US to chide Germany on eurozone growth at G7 meeting – euobserver

US Treasury Secretary Jack Lew will repeat calls for Germany to stimulate demand to drag the eurozone out of recession, according to US government sources.

Troika statement on the tenth review mission to Ireland – ECB

The EU’s Out-Of-Control Intelligence Services (That Don’t Exist) – Testosterone Pit

Officially, the EU doesn’t have an intelligence service. It’s dependent on the national intelligence services of its members. Officially. In reality, it is building an intelligence apparatus of six services, populated already by 1,300 specialists, some operating overseas, with vast databases at their fingertips. Much of it beyond any kind of democratic control.

UNITED STATES

Welcome to Saudi America – alphaville / FT

Surging oil production in US.

Regulators ‘Fine Tuning’ Bank Capital Rules – WSJ

U.S. banking regulators must give serious thought on whether to go further with capital requirements for the biggest banks as they finalize rules over the next two months

  STOCK MARKET

NYSE Margin Debt Approaches All-Time High – PragCap

Short Stocks Soar – Bespoke

Fewer And Fewer Stocks Are Driving This Rally – ZH

  FED

Fed ponders widening its bear hug to let in FMUs – alphaville / FT

Federal Reserve’s proposal to allow systemically important FMUs (financial market utilities) to establish accounts with the central bank and thereby get paid interest on their reserves, much like the primary dealers.

Fed’s Plosser: Costs of Bond Buying Outweigh Benefits – WSJ

Fed’s Plosser: Slow Inflation Not Yet a Problem – WSJ

Fed’s Evans: Low Inflation to Persist for Years – WSJ

U.S. inflation, now running about 1.5%, is below the Fed's long-term objective and should stay that way for years, although it's too soon for the central bank to react with a policy shift, the president of the Chicago Fed said.

ASIA

Australian Dollar, China and Iron Ore - What's behind the Aussie strength? – Macronomics

Is Abenomics Going to Put Japan Back on the Map? – The Big Picture

Abenomics Scores Victory: Dollar Crosses 100 Yen – WSJ

China to Switch Sides (of the Trilemma)? – Twenty-Cent Paradigms

Allowing the yuan to appreciate would also make exports from other developing countries more competitive, and reduce the pressure on them to keep their currencies undervalued.  That is, the biggest beneficiary of a shift by China might be Mexico.

OTHER

EM: What has Changed? – Marc to Market

The Great Squiggle of central banking – alphaville / FT

Inflation and growth falling, policy getting easier and easier.

The Complete Ira Sohn Conference Highlights – ZH

FINNISH

Pääkirjoitus: EMU-puskurien apu tarpeen – Iltalehti

Suomen on aika tehdä itse kaikki voitava eurokriisin vaimentamiseksi

Eurooppa-päivänä ei juhlita riehakkaasti, koska EU:lta puuttuu suunta – TalSa

Eurooppa-päivää vietettiin eilen Suomessa, tänään muualla EU:ssa. Henkseleiden paukutteluun ei kuitenkaan ole aihetta, koska EU:lta puuttuu suunta. Tästä kertovat eurokriisin ratkaisuyritykset ja asiantuntijoiden ristiriitaiset tulevaisuudenvisiot. Suunnannäyttäjäksi ei liene myöskään hallituksen kesäkuussa julkaistavasta EU-selonteosta.

Punaniska- vai punaporvarihallitus? – TE

Kolmen suuren puolueen hallitus ei ole mahdoton ajatus. Se kuitenkin johtaisi ennen näkemättömiin lehmänkauppoihin.

Suomi putoaa päätöspöydistä – Presidentti Niinistö varoittaa setelirahoituksen haitoista – TE

Euro- ja velkakriisi muuttaa maailman valtakuvioita, kun maailman keskuspankit ratkovat kriisiä painamalla lisää rahaa. Tasavallan presidentti Sauli Niinistö varoitti tästä kehityksestä keskiviikkona.

Kaupunkilomilla – Pauli Vahtera / IL