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MARKETS
Forward
Premia and the Carry Trade – Econbrowser
Mistrust
the Financial Storytellers – The
Psy-Fi Blog
In
praise of human, over machine intelligence – Humble
Student
Don’t
Tell Anybody About This Story on HFT Power Jump Trading – BB
Far from
Wall Street in a Chicago neighborhood once synonymous with urban blight, two
futures industry veterans are using secrecy and speed to mint fortunes.
Intro to
Technical Analysis - Does it Work? – About
We Settle
the Question about the Usefulness of Technical Analysis.
Soros
Chart Shows Euro-Yen Reaching 2008 High: Chart of the Day – BB
The euro
will surge to a six-year high against the yen by the end of 2014 as the
European Central Bank isn’t printing money as fast as the Bank of Japan,
according to Daiwa Securities Co.
Research
Review: Momentum Investing – The
Capital Spectator
Another
complementary factor model – Humble
Student
Benjamin
Graham: Father of the Efficient Market Hypothesis? – A
Wealth of Common Sense
Global
House Price Index –
The
Big Picture
http://www.ritholtz.com/blog/2014/07/global-house-price-index/
Markets:
Exuberance is not always ‘irrational’ – Reuters
High
Yield Credit Market Flashing Red As Outflows Surge – ZH
BofA warns
that flows follow returns and this week saw the biggest outflows from high-yield
funds in more than a year.
ECONOMICS
Tuesday
Central Banks – WSJ
Hilsenrath’s
Take: Fed Economists Find Good News on Long-term Unemployed * Wall Street
Adapts to New Regulatory Regime * Australia Central Banker Won’t Rule Out More
Rate Cuts * South Korea Edging Toward Interest Rate Cut—Economists * Japan Cuts
Growth Forecast, Urges Restraint on Debt Issuance
Tuesday
Macro: Japan Trims Its Growth Outlook – WSJ
Asian and
European equities popped higher in early trade, as the political after-effects
of the downing of Malaysia Airlines Flight 17 fade. As equities gained ground,
gold prices softened, while safe-haven sovereign bond yields ticked higher.
Otherwise, European news was thin on the ground. Earlier, the Japanese
government trimmed its inflation-adjusted growth forecasts for the economy, as
the April tax hikes take a bite out of consumption demand.
Wednesday
Central Banks – WSJ
Da Costa’s
Take: The Fed Still Has Little Reason to Worry About Inflation * Regulators
Said Deutsche Bank Suffers From Litany of Reporting Problems * Fed Concerned
About Effects of New Interest Rate Tool on Markets * BOE’s MPC Has No “Preset
Timing” For First Rate Move
Wednesday
Macro – WSJ
The latest
fad in global investing has been to plough money into emerging-market
currencies and the assets denominated in those, as well as those of countries
such as Australia whose exporters’ fortunes are tied to emerging markets. In a
world of low volatility, abundant central bank liquidity and record-low bond
yields, developing world markets battered during last year’s “taper tantrum”
are seen as one the few promising sources of higher returns.
Thursday
Central Banks – WSJ
Hannon’s
Take: BOE Seeks Clarity on Wages As First Rate Rise Awaits * Carney: U.K.
Economy Strengthening But Headwinds Likely to Keep Lid on Rate Rises * Conditions
Suggest Volatile Money Flows to China, Official Says * Deutsche Bank Finance
Chief Faces Heat After Financial-Reporting Exposure * Is the BRICS Bank More
“Democratic” Than the World Bank?
Thursday
Macro – WSJ
There was
generally good news on the global economic front Thursday, with both China’s
and the euro zone’s midmonth purchasing manager indexes showing solid recovery,
U.K. shoppers on a tear, and Spain delivering the welcome news of a drop in
unemployment. All of that, along with solid industrial activity data out of
Taiwan on Wednesday, suggest a synchronized pickup in global demand
Friday Central
Banks – WSJ
Hilsenrath’s
Take: In A Quiet Moment, Big Decisions Loom for Fed * Greenspan Says Bubbles
Can’t Be Stopped Without ‘Crunch’ * Japan’s Inflation Slows for Second Month
* U.K. Economy Passes Pre-Crisis Peak * Russia Central Bank Raises Key
Rate to 8.0%
Friday
Macro – WSJ
Divergence
across the developed world economies is the theme of Friday’s data flow.
Whereas Japan and Germany produced numbers that illustrate the ongoing struggle
for the third- and fourth-largest economies, respectively, the U.K.’s GDP
report highlighted its remarkable recovery over the past year or so and recent
data in the U.S. point to a healthier outlook there.
World
Economic Outlook Update – IMF
The Slow
Recovery Continues
– iMFdirect
The global
growth projection for 2014 has been marked down by 0.3 percent to 3.4 percent,
reflecting both the legacy of the weak first quarter, particularly in the United
States, and a less optimistic outlook for several emerging markets. With
somewhat stronger growth expected in some advanced economies next year, the
global growth projection for 2015 remains at 4 percent.
JULY MARKIT PMI
China
Manufacturing Gauge Rises to 18-Month High on Stimulus – BB
Economists
React: China’s Manufacturing Sector Looking Good – WSJ
China July
HSBC flash PMI at 18-month high – Reuters
German
Services Output Expands at Fastest Pace in Three Years – BB
French
Manufacturing Contracts in Sign of Sluggish Recovery – BB
Euro PMIs
suggest higher activity in H2 – Danske
Bank
Euro
Economy Shows Unexpected Strength After ECB Action – BB
Euro zone
business on solid footing in July but firms cut prices – Reuters
Global
economy starts second half on solid footing: PMIs – Reuters
Manufacturing
PMI Euphoria Boosts Futures To Fresh Record Highs – ZH
Strong but
plenty of reasons not to get carried away – TradingFloor
IMF
fears ultra-low rates are fuelling bubbles – The
Telegraph
Chief
economist Olivier Blanchard says fund is watching financial markets “like a
hawk” because world economy is still too fragile to withstand interest rate
rises
Before the
Federal Reserve and fellow central banks go to work raising interest rates,
they first need others to go to work. That’s the signal from policy makers
worldwide, as even those whose mandates focus on inflation put the health of
labor markets at the heart of their decision making.
Michael
Woodford interview on QE – FED
Discussing
the paper "Conventional and Unconventional Monetary Policy with Endogenous
Collateral Constraints"
Central
Banks: Stagnant wages leave central banks fretting – Reuters
After
injecting trillions of dollars into the global financial system over the last
six years, the world's central bankers now face a vexing question: why is so
little of it showing up in workers' paychecks?
ECB
Paper Identifies Most Growth-Friendly Cuts – WSJ
Great
Graphic: G7 GDP – Marc to
Market
When are
monopolies a good thing? – FT
Liquidity
Trap and Excessive Leverage – IMF
In our
model, contractionary monetary policy is inferior to macroprudential policy in
addressing excessive leverage, and it can even have the unintended consequence
of increasing leverage.
DEBATE
Neofiscalist
delusions? – Worthwhile
What annoys
me about market monetarists – Mainly
Macro
Asymmetrical
Doctrines (Vaguely Wonkish) – Krugman
/ NYT