Previously
on MoreLiver’s:
EUROPE
Euro and Non-Euro
Countries and Fiscal Policy – Econbrowser
Contractionary fiscal policy is ...
contractionary
France’s charmed life falls
prey to excessive state spending and regulation
European Commission’s leaked paper: industrial electricity prices in the EU are more than double than in the
US and 20% higher than those in China.
Sructural reform agenda’ has been defined in exceptionally vague terms,
and that it is still unclear precisely which reforms would lead to tangible
economic improvements in European countries. With the European Parliament due
to hold elections in May, there may be an opportunity for opposition parties to
politicise the issue and subject prevailing policies to proper scrutiny.
Nordic Government
Debt Handbook – Nordea
An overview of the government debt markets of the four Nordic countries:
Finland, Denmark, Sweden and Norway. We offer details on
the structure of the market, instruments, outstanding volumes, marketplace,
auctions, issuance plans, important dates and ownership.
Germany’s finance minister made a lightning visit to Brussels on Monday in an unusual attempt to end a
stalemate with European lawmakers on banking union.
Banking union hits
another bump in the road – Open
Europe
The concerns focuses on the agreement to use an intergovernmental treaty
to set up the resolution fund – a move demanded by Germany to provide
additional legal safeguards against the pooling of risk and resources… this
dispute could delay the adoption of the SRM until after the European elections
– a delay which could increase market uncertainty, especially around the bank
stress tests.
ECB Fails To
Sterilize Bond Purchases In 4th Failure Of Last 6 Attempts: Harbinger Of
Upcoming Unsterilized QE? – ZH
Peculiarities and
aberrations in FX and FISH – TradingFloor
Irish and Portuguese bond plans raise pan-Eurozone health questions * Have
Eurozone risk assets been mispriced? * Rate curve's sharp front-end rise may
trigger more monetary easing
Greek court could
find wage cuts to certain public servants unconstitutional - Kathimerini
Strong ZEW reading in
January – Merkelnomics
UNITED STATES
The QE Weakness That
Might Just Bode Well for Unwinding – WSJ
One possible upshot of their findings is that unwinding QE—selling the
huge portfolios of assets accumulated in the past few years—might not be as disruptive
as many expect now that financial markets are more or less back to normal.
Next Cut in Fed Bond
Buys Looms – WSJ
Reduction to $65 Billion Could Be Announced on Jan. 29
The Week That Was – Tim
Duy’s Fed Watch
Policymakers are generally comfortable with the pace of tapering at $10
billion per meeting. That could be
reconsidered if we see sustained weakness in future data, but I don't think
that should be the base case… I think it is
reasonable to believe the primary conflict at the next FOMC meeting is not over
asset purchases, but on the communications strategy. The direction and nature of "enhanced
forward guidance" is becoming a contentious issue now that the unemployment
rate is just a breath away from the 6.5% threshold.
ASIA
Robust domestic saving
and a temporary inflow of foreign capital caused by the Global Crisis have
prevented a crisis thus far. As both of these factors become less applicable
the government faces pressure to reduce debt-to-GDP ratio can be brought under
control quickly.
GDP figures – particularly China’s – are a flawed
measure of economic performance.
The PBOC’s big test – alphaville
/ FT
OTHER
New Financial
Forecasts – Nordea
Fed: The Fed is expected
to stick to the course set for tapering, reducing its monthly asset purchases
by USD 10bn per FOMC meeting. QE is expected to end in October. Riksbanken: We expect no new rate cuts
after the December surprise. The growth outlook has improved and we do not
expect inflation to surprise the Riksbank on the downside again. Rates: We expect 10-year USD yields to
remain in a trading range of 2.70% - 3.05% in the near term, but we have lifted
our year-end forecast by 25bp to 3.5%. EUR money market rates are seeing upward
pressure. Thus, we have lifted the short-end of the EUR curve just a bit. FX: We keep our 3-month EUR/USD
forecast of 1.33 unchanged, but still see upward pressure in the near term. We
have moved a big part of the expected GBP strengthening forward and now see
GBP/USD at 1.66 on a 3-month’s horizon. Longer out, we see most GBP potential
vs the EUR. 8.70 is our new 3-month’s forecast for EUR/SEK (from 8.90) and 8.45
for mid-year. A few more months of convincing hard data will be sufficient to
reprice short rates. We think the recent move in EUR/NOK is overdone and expect
a return to 8.10 in 3-month’s time. We have updated our EUR/TRY forecast to
reflect the recent negative developments in the political arena in Turkey. And, USD/CNY
projections are revised modestly. Commodities:
We see downside risks to our oil prices forecast for Q1 of USD 108/brl as the
physical market is set to weaken as we move into the refinery maintenance season
Bloomberg Global
Investor Poll – BB
Calling 2014 ahead of the World Economic Forum at Davos.
‘Emerging
Markets? Never Heard of ‘Em’ and Other Nuggets from BAML Poll – WSJ
Tapering and
emerging-market capital flows – voxeu.org
This column presents
the results of recent World Bank research into these effects. In the baseline
scenario, the unwinding of QE is predicted to reduce capital inflows by about
10%, or 0.6% of developing-country GDP by 2016. However, if markets react
abruptly, capital flows could decline by as much as 80% for several months.
Secular Stagnation
Heads South – Project
Syndicate
An extraordinarily
benevolent external environment sustained rapid GDP growth in Latin America in the years following the 2008-2009 global
economic crisis. But now, as commodity prices fall and the Fed’s gradual exit
from quantitative easing boosts US interest rates, the region’s economies could
be facing a long-term slowdown.
The 85 Richest People
Have The Same Wealth As Half The World's Population – ZH
Bubbles as a
deflationary escape chute – alphaville
/ FT
In other words bubbles
result from society’s attempt to distribute increasing national wealth in a way
that preserves incentives but still benefits everyone, and old wealth
attempting to escape that distribution out of fear of the social hierarchal
loss that can lead to.
Facts we should
remember – Frances
Coppola / Pieria
The Zero Lower Bound (ZLB) does not mean rates are necessarily zero * People
consume out of income not wealth * Supply depends on demand in a financial
crisis * Reliance on exports does not equal a vibrant economy
FINNISH
Kiinan luotonanto ja kasvu hidastuvat – Handelsbanken
Kiinan vuoden
2013 talouskasvu yllätti odotukset positiivisesti ollen 7,8 prosenttia. Maan
teollisuuden aktiviteetti vakautui vuoden loppua kohti, mutta palveluiden
aktiviteetti hidastui. Kiinan keskushallinto pyrkii tosissaan hidastamaan
luotonannon kasvua, erityisesti paikallishallinnon luottoja. Tämä, kuten
muutkin reformit, todennäköisesti hidastaa BKT:n kasvua vuonna 2014.
Lainakatto voisi vaikeuttaa tuhansien
asunnonhankintaa – TalSa
Taloussanomien arvion mukaan yli 30 000
asuntokauppaa olisi jäänyt tekemättä ilman lisävakuuksia tai omaa rahaa vuonna
2012, jos asuntolainakatto olisi ollut tuolloin käytössä. Lue, minkälaisia
vaikutuksia lainakatolla olisi.
Yli 3 miljoonaa italialaista on lyönyt
hanskat tiskiin – Verkkouutiset
Määrä vastaa
13 prosenttia maan työvoimasta. Se on yli kolme kertaa koko EU:n keskiarvoa
suurempi, joka on 4,1 prosenttia työvoimasta. Syyksi työn etsinnän
lopettamiselle puolet luovuttaneista ilmoittaa, ettei työtä kuitenkaan löydy.
EIT: Vastuu nettikirjoittelusta on
julkaisijalla – HS
Lähes 70
mediayhtiötä ja kansalaisjärjestöä vaatii virolaistapausta uudelleen oikeuteen
Antti Rinne uhkaa perussuomalaisia – Verkkouutiset
Jyrki Katainen: Soini piirtää väärän
asetelman – Verkkouutiset
Ajaako verottaja yritykset pois Suomesta? – Janne
Juusela / Mielipide HS
Verohallinto turvaa Suomen verotulot – Jari
Salokoski / Mielipide HS
Joulukuun työttömyysaste 7,9 prosenttia – Tilastokeskus
Finland Unemployment rate kept rising in December – Handelsbanken