16th Mar - Fed week, Europe the same

Previously on MoreLiver’s:

Guest: Currency war - The China Syndrome

W/E: Weekly Support

Friday: EURUSD continues down

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EUROPE

Backward Engineering. Money before culture. – Polemic’s Pains

The straight jacket of the EU is the Euro. Its unionised monetary policy without fiscal union has led to a veritable monetary buffet.

Implications of private debt for euro exit – vox

As the Eurozone crisis lingers on, euro exit is now being debated in ‘core’ as well as ‘periphery’ countries. This column examines the potential costs of euro exit, using France as an example. The authors estimate that 30% of private marketable debt would be redenominated, but since only 36% of revenues would be redenominated, the aggregate currency mismatch is relatively modest. However, the immediate financial cost of exiting the euro would nevertheless be substantial if public authorities were to bail out systemic and highly exposed companies.

David Cameron interview: A job half-done – FT

PM keen to resolve country’s divisions and settle the issue of Britain’s role in Europe

Animation: Juncker Commission explained in 3 minutes – vieuws

Finland: Old challenges for a new government – Danske Bank

Spineless Politicians Anger Finnish Premier as Debts Mount – BB

Krugman Is Told to Read More, Write Less, by Swedish Riksbanker – BB

Explaining the pain in Spain – FT

Spain’s peak-to-trough declines in employment and GDP were about the same as what you would expect for a US state that had a relatively large manufacturing sector and an enormous boom and bust in construction. Relative to the closest analogies we could find in the US, Spain actually did quite well considering the poor hand it was dealt — and that’s not even considering Spain’s limited policy flexibility thanks to its membership in the euro area.

  GREECE

Presenting an agenda for Europe – Yanis Varoufakis

at Ambrosetti, Lake Como, 14th March 2015)

Varoufakis spreads gospel of radical reform to Italy’s capitalists – FT

His bravura performance at the Ambrosetti finance forum in Cernobbio on Saturday appeared to win over a sceptical audience of Italian business leaders…One former Italian official, well versed in the ways of the EU, said: “Being right does not always win you the argument.”

French EU Commissioner Moscovici: 'A Grexit Would Be a Catastrophe' – Spiegel

EU currency commissioner Pierre Moscovici discusses efforts in Brussels to ensure that Greece remains in the euro zone and why he believes a Greek exit would be a disaster for Europe.

Endgame: Power Struggle in Brussels and Berlin over Fate of Greece – Spiegel

European Commission President Juncker wants to keep Greece in the euro zone, no matter what the price. Member states, though, are beginning to lose their patience. Who will ultimately have the final say?

Greek Crisis Tests ECB’s Credibility – WSJ

The central bank must decide if Greek banks should be allowed to use scarce liquidity to roll over their existing holdings of T-bills

Germans Tired of Greek Demands Want Country to Exit Euro – BB

  EUROPEAN CENTRAL BANK

Quantitative easing and the decline of the euro – FT

Recent falls in the European single currency are no cause for alarm

Four Strange Tales of European Debt – View / BB

As Europe is currently proving, the bond market can be just as paradoxical once interest rates drop below zero. Here are some examples.

There’s no right to parity – FT

Nordvig, much like Englander, thinks there is a “high probability” that the Fed will turn more dovish before the June FOMC meeting and think that if the euro heads towards 0.95 or lower in the next 1-2 months then some members of the ECB governing council will start to get fidgety.

Progress with structural reforms across the euro area and their possible impacts – ECB

Economic Bulletin 2/2015: recent progress with structural reforms in the euro area and possible impacts: they can substantially boost productivity, employment and growth. However, more reform efforts are needed at country and European levels.

How The ECB Broke Europe's Bond Market – ZH

The biggest problem facing Europe when it comes to unconventional monetary policy: the lack, not scarcity, but outright shortage of collateral.

ECB Reports Only €9.8 Billion In Bond Purchases In First Full Week Of Q€ - ZH

UNITED STATES

What Goldman's Clients Are Most Concerned About – ZH

DB Is The First Major Bank To Predict Drop In 2015 S&P500 EPS – ZH

The debt ceiling, yet again – Brookings

US Quarterly – After a dip consumers to lift US economy – ABN AMRO

If Economists Were Right, You Would Have a Raise by Now – BB

States show weakening link between their jobless rates and wage growth

The US Dollar Has No Definitive Effect on the S&P 500 – Joshua Brown

Why "Missed Expectations" Are Not What They Seem – The Fat Pitch

Fall in earnings has been driven almost exclusively by energy sector

  FEDERAL RESERVE

FOMC Preview: Remove "Patient" – Calculated Risk

Five questions ahead of US Federal Reserve meeting – FT

Dollar strength weighs on Fed rate-setters – FT

The Federal Reserve is ready for ‘lift off’ on interest rates – FT

FOMC preview – Danske Bank

Fedspeak Cheatsheet: What Are Fed Policy Makers Saying? – WSJ

The Fed’s getting closer to raising rates. How much is up in the air – WaPo

REGULARS

Daily Central Banks – WSJ

Schlesinger’s Take: Will Union Pay Pacts Rescue BOJ Revival Scenario? * Fedspeak Cheatsheet: What Are Fed Policy Makers Saying? * Republican Pushes Fed’s Yellen on ‘Criminal’ Leak Probe *
 BOE’s Intelligence Chief Says Buckle Up For Volatility * China Plans More Action to Spur Growth

Daily Macro – WSJ

A divergence in stock market trends is underscoring the economic impact of the dollar’s surge against the rest of the world’s currency, especially against the euro… This is the market manifestation of a policy divergence that, if it continues, could stoke political and trade tensions. The other question is whether the Federal Reserve, which meets this week, is in any way concerned about the rapidity of the dollar’s gains.

Danske Daily – Danske Bank

Eye-Opener – Nordea

All eyes on the big central banks, the Fed to lose its patience * Bond markets more calm than the EUR/USD

Daily Shot – TF

In China officials announced a potential slowdown of economic growth. An annual growth rate of 6.5% would be low for the large country, but still exceptionally high compared to the rest of the world. Goldman Sachs is expecting the euro to further fall against the USD and hit 0.80 USD by 2018. In the meanwhile, US companies seem to be well prepared for a possible rate hike by the Fed.

US Open – ZH

Futures Rebound After EUR Finds 1.05 Support; China Stocks Soar; Im-"Patient" Fed On Deck

From the Floor – TF

WTI hits six-year low of $44.27/barrel with potential to go all the way to $31/b * US benchmark continues to weaken on back of oil inventories, strong dollar * China PM Li Keqiang boosts sentiment with stimulus hints, says Moltke-Leth * Japan's Abe struggling to get big corporations on board in anti-deflation push * EURUSD one-month options extremely sensitive ahead of FOMC, says Rieunier * September still most likely call on Fed rate hike, says Koefoed * EURUSD spot in 1.0550 zone after hitting fresh low of 1.0457 * Gold finds some support but action concentrated in XAUEUR, says Hansen

Martin Sandbu’s Free Lunch – FT

Fifty years since the Moynihan report: The generational determinants of US economic prospects

OTHER

Debt, charted – FT

A GS note on debt build-ups, and what usually happens after them.

Yield Forecast Update – Danske Bank

Fed hikes draw closer as ECB launches QE programme

FOMC, BoJ and SNB ... plenty of event risk this week – TF

This will be an active week in FX with event risk for the major crosses * The US Federal Reserve, BoJ and SNB give monetary policy statements this week * The EURUSD will be centre stage for trend followers given its recent decline

EM monetary policy and the fear of the Fed – FT

If there’s one thing that central banks like, it is being independent. But EM central bankers’ decisions are currently being made with the influence of their developed economy counterparts looming large over them.

The dollar almighty will create risks – FT

US currency can boost global economy but there are caveats

Four Central Banks Meet but FOMC is the Key – Marc to Market

Where The Top 0.002% Of The World Live – ZH

FX: "patience" is virtue – Nordea

Fed is "last (wo)man standing" in the global FX musical chairs game. The USD is also a differentiating factor between this and the previous Fed rate cycle. Will they blink this week?

Negative rates and financial intermediation – Bruegel

While negative interest rates might be needed from a macroeconomic point of view, they create important challenges for financial intermediaries, as it is not clear how they could maintain their spread business in the below-zero lower bound environment.

FINNISH

Aamukatsaus – Nordea

Markkinat alihinnoittelevat Fedin koronnostoja | USA:n kuluttajaluottamus ennakoitua heikompi

Venäjän infosodan uskottavuus lopussa Saksassa – TalSa

  TALOUS

Kaksi talousreseptiä – lääkettä vai myrkkyä? – Jan Hurri / TalSa

Viime viikolla ilmestyi kaksi analyysiä Suomen talouden ongelmista ja niiden hoitamisesta, yksi valtioneuvoston pyynnöstä ja toinen pyytämättä. Potilas on sama, mutta taudinmäärittelyt ja lääkemääräykset keskenään tyystin vastakkaisia. Reseptien vertailu herättää kysymyksen, saiko hallitus lääke- vai myrkkymääräyksen.

Kommentti: Puolueiden leikkauslistat ovat silkkaa sumutusta – IS

Esitetyt leikkausehdotukset ovat täysin eri maailmasta kuin Suomen julkisen sektorin 10 miljardin euron alijäämä, kirjoittaa IS:n politiikan toimituksen esimies Mika Koskinen.

Muutama mies päättää, mitä mieltä Suomessa saa olla – Kansan Uutiset

Komissaari: EU:ssa vain 4 ongelmamaata, mukana Suomi – KL

EU-komission varapuheenjohtaja Valdis Dombrovskis patistaa Suomea rakenteellisiin uudistuksiin.

Krugman ja Ruotsin keskuspankki sanasodassa – TalSa

Ruotsin keskuspankki tyrmää talouden Nobelin saaneen Paul Krugmanin esittämän kritiikin. Krugman syytti ruotsia "sadomonetarismista".

Suomen Pankin Liikanen: Suomi hyötyy lainaostoista – TalSa

Viiden kohdan työelämän uudistamis- ja työllistämisohjelma – Akava

*Piketty: Euroalue on hirviö – KL

Taloustieteilijä Thomas Piketty sanoo, että ”luomalla euroalueen olemme luoneet hirviön”. Hän myös pitää Euroopan kasvu- ja vakaussopimusta katastrofina.

*Toisten asioihin sekaantuminen - hyvä asia? – Henri Myllyniemi / US

Tyly arvio Suomen tilasta: ”Lopputulos tullut karmaisevalla tavalla eteemme” – IS

Björn Wahlroos ihmettelee Suomea, jossa elvytyksen uskotaan ratkaisevan lähes kaikki talouden ongelmat.

Keskiluokka maksaisi perintöveron poistamisen – YLE

Ruotsi ja Norja ovat luopuneet perintöverosta. Pitäisikö Suomen tehdä samoin? Pitäisi, sanovat Perheyritysten liitto ja PTT. Ei, sanovat muut asiantuntijat ja muistuttavat, että veron poistaminen kävisi keskiluokalle kalliiksi.

Näkökulma: Lopeta jo toi vonkaaminen! – YLE

Valtaosa faktoista puhuu sen puolesta, ettei perintöverosta kannata luopua, kirjoittaa A-studion toimittaja Hanna Säntti näkökulmassaan.

Talouspolitiikan muunneltu totuus – Olli Rehn / US

Kuka muuntelee totuutta? – Markus Sovala / VM

Rahaministeriö vastaa Olli Rehnin syytöksiin: "Kova, perustelematon väite" – Verkkouutiset

  POLITIIKKA

Vihainen Stubb lyttäsi selkärangattomat poliitikot Bloombergin haastattelussa – IL

Matti Maunu Kommentti: Kirje pääministerille – MTV

Vaalivoitto näyttää varmalta - tällainen kepu-Suomesta tulee – IL

Keskustan johdolla ajetaan paremmilla teillä, maksetaan vähemmän veroja ja luodaan uusia työpaikkoja - ainakin vaalilupausten mukaan.

Kataisen ja Stubbin vastuunkannosta – Professorin ajatuksia

Kun hoivasta tuli bisnes – kuinka paljon vanhuksilla ja vammaisilla saa tehdä voittoa? – HS

Miljardien hukkaputki – IL

Kiviporan laulaminen Helsingin uumenissa lisäisi tuottavuutta soten verran, kirjoittaa Iltalehden  kustantaja Kari Kivelä.