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Wednesday, February 5

5th Feb - After positive Jan PMI, ECB ahead





Previously on MoreLiver’s:

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EUROPE
The German economy is not as strong as it looksEuropp / LSE
Levels of internal investment are relatively low in comparison to other European countries, and that demographic trends are likely to impede future development. Rather than relying on Germany to pull Europe out of its crisis, helping ‘periphery’ countries to stand on their own feet may be a more productive solution.

Booze, Brussels and the next Commission presidentThe World / FT
The EU has just been through a wrenching crisis that has raised questions about its very survival. And it is also now a club of 28 countries. But the three main candidates for Commission president are all traditional European federalists – drawn from the seven founding member states.

  CRISIS COUNTRIES
Soaring Corruption in Spain: Perception or Reality?WSJ


Chart Of The Day: Spanish "Recovery" EditionZH
 
Hryvnia? We hardly knew yealphaville / FT


BNP Warns "The Run On Ukrainian Deposits May Have Already Started"ZH
‘Meaningful FX Run’ Hammers Ukraine’s CurrencyWSJ


EU Said to Weigh Extending Greek Loans to 50 YearsBB

  EUROPEAN CENTRAL BANK
ECB Preview: End of sterilisation?TradingFloor
While the ECB will not necessarily act this week, a consensus has formed that something will be coming. Sterilisation, the sacred cow of hard money policy, could be near the end of the road.

ECB's next steps could involve suspending SMP sterilization - instant QESober Look

An ECB Nail-Biter: Will It Cut Rates?WSJ
 
ECB PreviewMarc to Market
The ECB meets on Thursday amid heightened speculation it will make a new initia
tive given the deterioration of the two pillars of its monetary policy, money supply and inflation.  

Deflation, now vs thenalphaville / FT
As we await for the ECB to act or not later in the week, Capital Economics’ Jonathan Loynes took the time to note there are good reasons to think a new bout of deflation could be both longer- lasting and more pernicious than the last one

If Not Quantitative Easing, What Can the ECB Do?PIIE
Admittedly, purchases of private bank assets by national central banks would not help the rebalancing of the euro area. They also would not require Germany and other core countries to boost domestic demand and accept higher inflation. But Germany is more likely to accept this course of action now than to pursue greater inflation throughout the euro area, even at the risk of future risk mutualization.

The ECB should be more aggressive on monetary policyBruegel
Promise to do “whatever it takes” stabilized the euro but hesitant stance to fight low inflation or even deflation will undermine stability



What to Expect From the ECB MeetingWSJ
 

UNITED STATES


Employment Preview for January: Taking the OverCalculated Risk
 
  FISCAL
Treasury Bill Yields Are Surging As Debt-Ceiling X-Date Approaches ZH

CBO Projection: Budget Deficit to be below 3% of GDP for next four yearsCalculated Risk

  FEDERAL RESERVE
Fed’s Evans: Rate Increase Still Unlikely Until 2015WSJ

No End To Tapering YetTim Duy’s Fed Watch
 The Fed isn't ready to change course.  Recent turbulence is enough to peak their curiosity, not enough to suggest that tapering was premature.  

Daniel K Tarullo: Volcker RuleBIS
Testimony by Mr Daniel K Tarullo, Member of the Board of Governors of the Federal Reserve System, before the Committee on Financial Services, U.S. House of Representatives, Washington DC, 5 February 2014.

EMERGING
The $3 Trillion Hole - Why EM Matters To European BanksZH



Everything You Need to Know About the Emerging-Market Currency CollapseThe Atlantic
Money poured into developing economies after the financial crisis, and now it's starting to pour out. How much should we worry?
 
Charting the worst hit in the emerging market retreatbeyondbrics / FT

Above the noise: Why do we care about emerging markets?TradingFloor
Emerging markets only account for about 10.6 percent of the total investable equity universe so why do we care about these countries? We provide the answer, and highlight our favourite emerging market countries.



The Next Steps For The EM Crisis (In 4 Charts)ZH

5 Takeaways From EMPEA’s Annual Report WSJ
Private equity investors’ response to whipsawing global public markets is more often than not “keep calm and carry on.” That seems to be the case in emerging markets, according to the latest annual data published by the Emerging Markets Private Equity Association.


OTHER
Investment Outlook: ding dong — is this a bear song?TradingFloor
January saw a tough but familiar start to the new investment year: equities fell as did bond yields and EM FX looked like something to which even alley cats would give a wide berth. This is most likely just another correction in a longer-term upturn.

Martin Wolf Sounds Cautionary Note on Rise of RobotsNaked Capitalism



2 Senior Foreign Exchange Executives to Step DownNYT
How the FX Fallout Has Spread WSJ

How The Rest Of The World Sells Its Government BondsZH


FINNISH
Sasi: Kreikan uusi tukipaketti olisi ongelmallinen – "velat maksettava takaisin"Verkkouutiset
Lähteet: Kreikan lainojen takaisinmaksua aiotaan lykätäTalSa

Hallitus kärsii muiden mokistaRisto Pennanen / TalSa
Edelliset hallitukset ovat vaikeaan taloustilanteeseen enemmän syyllisiä kuin nykyinen.

Keskuskauppakamari: Julkinen talous kuntoon kolmen askeleen ohjelmallaVerkkouutiset

"Kiinan pankkitulivuori savuttaa jo"TalSa
Kiinan pankkien luottokanta on paisunut kuin pullataikina. Nordean pääekonomisti ja tutkimusjohtaja Aki Kangasharju uskoo, että korjausliike on tulossa.

Kansantalouden tuotanto pieneni marraskuussa 2013Tilastokeskus