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Friday, November 21

21st Nov - China cuts rates, Draghi goes easy



Previously on MoreLiver’s:

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EUROPE
  EUROPEAN CENTRAL BANK
ECB entering 'very dangerous territory' warns S&P The Telegraph
“The risk of a triple-dip recession have increased. The ECB has one last arrow and that is quantitative easing of €1 trillion," said the credit rating agency

Benchmarking the AQR: A tale of two leverage ratiosVoxEU.org
The ECB estimated that Eurozone banks would face a capital shortfall of €25 billion in a severe crisis. Earlier work by the authors estimated the shortfall to be 30 times higher. This column argues that this striking divergence can be explained by the ECB’s reliance on static risk-weights.

Draghi speech: Monetary policy in the euro areaECB
Opening speech at the Frankfurt European Banking Congress, 21 November 2014

Weidmann: Banking union and regulatory reforms - mission accomplished?BIS
Speech at the 24th Frankfurt European Banking Congress, Frankfurt am Main, 21 November 2014.

ECB's Draghi throws door to quantitative easing wide open as recovery wanesReuters
Draghi threw the door wide open on Friday for more dramatic action to rescue the euro zone economy, saying "excessively low" inflation had to be raised quickly by whatever means necessary.

Draghi Says ECB Must Raise Inflation as Fast as PossibleBB
Draghi said the ECB must drive inflation higher quickly, and will broaden its asset-purchase program if needed to achieve that.

Draghi’s QE Question Is If Benefits Are Worth HeadacheBB
Put aside the obstacles to bond-buying seen by German officials and a case can be made with economics alone that the policy would do little to provide a fresh source of strength for the region beyond weakening its currency.

ASIA
Making Abenomics More Voter-Friendly–But at a CostWSJ

  CHINA RATE CUT
China surprises with interest rate cut to spur growth – Reuters
China cuts interest rates – Danske Bank
Futures Soar On Surprise Chinese Rate Cut – ZH
No-one ever expects the PBOCFT
Goldman: "Slightly Useful" – ZH
China: Surprise rate cut may be a policy mistake – Nordea

OTHER
Daily Central BanksWSJ
Hilsenrath’s Take: Dealer Survey Highlights Fed’s Looming Jobs Vs Inflation Conundrum * Fed Launches Review of Practices for Supervising Big Banks * Goldman Fires Two Employees Over Confidential Fed Information * Draghi Says ECB Ready to Expand Asset-Purchase Programs * China Central Bank Cuts Interest Rates * Japan’s Finance Minister Rings Alarm Over Yen Weakness

Daily MacroWSJ
An interest rate cut by China sent shock waves around with commodity prices in particular rallying in anticipation of higher Chinese demand… The big question now is whether European Central Bank President Mario Draghi can muster enough support within his organization for a more aggressive monetary stimulus program for the eurozone.

FI Eye-Opener: A day full of speakersNordea
Bond yields down on weaker data from Europe and China. The US isn’t Europe. A quiet day for data releases, but speeches from Draghi, Weidmann and Schäuble.

Danske DailyDanske Bank

Draghi Talks Euro Lower, Aso Lifts YenMarc to Market

Macro Watch: Draghi weighs on EUR, China cuts ratesTradingFloor
China announced that it will cut its key policy rates, effective November 22 while ECB president Mario Draghi pushed the euro lower with dovish talk

From the floor: A day of caution TradingFloor
Japanese finance minister says yen fell too fast * Data bolster EURUSD bear case, but price action disappoints * USDJPY, EURCHF volatilities sell off * Goldman Sachs a good vehicle to trade strong US economy: Garnry * US Treasury bonds, German bunds signal monetary policy divergence

Draghi soft, US-German bond spread too high, breakup talkTradingFloor
The spread between the US and German bonds is at historical highs, and the previous cycle lows have marked important turning points in the global markets - perhaps this time as well? ECB’s Draghi will be speaking in an important event, and his recent messages have remained dovish. Perhaps markets are counting a bit too much into his actions? Finally, In 2005 I guessed that the euro area's breakup would take 10 years. Since July 2015 is getting close, it's a worthy reminder of the ultimate tail risk.

FINNISH
Aamukatsaus – Perjantai 21.11.2014Nordea
Euroalueen piristymistä saadaan odottaa | Venäläinen kuluttaja ei jaksa enää | USA:n pohjainflaatio voimistui odotettua enemmän

Hollanti valmistautui lähtemään eurostaVerkkouutiset

Usko parasta, älä suosituinta perusteluaLauri Holappa / HS

  KOKOOMUS
Kokoomuksen kannatus yhtä huono kuin vaaleissa 1972HS
Keskusta repi jo 7 prosentti­yksikön kaulan kokoomukseen

Pääkirjoitus: Kokoomus otti Stubbissa riskin, joka uhkaa kostautuaHS

Stubb oli kokoomukselta emämokaKU

Kokoomus menettäisi HS-gallupilla kahdeksan kansanedustajaaVerkkouutiset

Puoluetoverilta todella tyly arvio Stubbista - "Samaan aikaan ei voi olla boheemi, pääministeri ja nouseva kannatus"IS

Kommentti: Stubb-euforiaa seurasi täydellinen mahalasku IS

Näkökulma: Kokoomus on nyt pahasti eksyksissäIL

Näkökulma: Liikkuvien iso armeijaIL