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EUROPE
Finnish
coalition talks start as Sipila’s party secures victory – FT
GREECE
The ECB Is
Considering A Parallel Greek Currency – ZH
Wolfgang Münchau:
Greek default necessary but Grexit is not – FT
Greece's Varoufakis warns of Grexit
contagion – Reuters
Euro
working group to meet Wednesday, deal still sought: Greek official – Reuters
Mohamed A. El-Erian:
11 Acts Toward a Greek Tragedy – View
/ BB
Irresisistible
Force Meets Immovable Object – Marc
to Market
Greece on the Brink – Krugman
/ NYT
EUROPEAN CENTRAL BANK
When The
ECB Starts Buying Corporate Bonds And Stocks Here's Where It Should Look – ZH
Euro
area economic outlook, the ECB’s monetary policy and current policy challenges – ECB
Draghi’s
speech at IMF meeting
Annual
Report 2014 – ECB
UNITED STATES
CPI
review: the inflation cycle has turned – Nordea
With more
signs that underlying inflation has bottomed out today’s CPI report supports
the view that the US inflation cycle has turned, marking a key milepost along
the road to Fed tightening. A second straight increase in core CPI inflation
should give Fed policy makers greater confidence that inflation will
reaccelerate toward 2% over the medium term, supporting our expectation that
policy normalisation will begin in September.
ASIA
China’s reform strategy implies lower
import growth. China is rebalancing its exports and
public spending-led growth model towards a more long-term sustainable
alternative, marked by a rising share of private consumption. This goes hand in
hand with a gradual economic slowdown, which also implies that import growth is
structurally coming down. In this report, we will focus on what this means for China’s commodity imports.
China Moves to Stimulus Mode With Cut to
Bank Reserve Ratio – BB
China Cuts Reserve Ratio Most Since 2008–
ZH
PBoC cuts
the reserve requirement by 100bp in aggressive easing move – Danske
Bank
China Floats QE Trial Balloon, PBoC May
Launch LTROs – ZH
OTHER
China cuts reserve requirement ratio by 100
basis points to 18.5% * Before this, China US-listed ETFs were tanking, on
potential financing pressure * RBA, BoE minutes key this week and AUD over 0.7800
is short addition territory
ECONOMICS
The Effect
of Fiscal Policy on Growth and Stability – Econmatters
The True
Levels of Government and Social Expenditures in Advanced Economies – PIIE
Confidence
– Simon
Wren-Lewis
Pricing
Risks Across Currency Denominations
Types of EZ
convergence: Nominal, real and structural – vox
Current account
"Core-periphery dualism" in the EMU – Bank
of Italy
It’s a
Near-Zero World, and ‘Structural Reforms’ May Actually Hurt – WSJ
Blanchard
on Countours of Policy – John
Cochrane
Did macro
theory fail us in the crisis? – Simon
Wren-Lewis
Noah Smith:
What Causes Recessions – sticky prices? – View
/ BB
Olivier
Blanchard: Rethinking macroeconomic policy: Introduction – vox
REGULARS
Daily
Central Banks – WSJ
Hilsenrath’s
Take: What If This Is As Good As It Gets? * China’s Central Bank May Take a Page from
Europe’s Playbook * China Central Bank
Cuts Banks’ Reserve-Requirement Ratio * Draghi Rejects Talk of Greek Exit * Bank
of Japan Chief Says He Sees Progress On Higher
Inflation
Daily
Macro – WSJ
The Chinese
central bank’s decision to cut its banks’ reserve requirement helped distract
European investors in early trading – Asian markets were down on Friday’s Wall
Street losses and concerns that Chinese regulators might want to take some of
the steam out of the rampant Chinese equity market. But Chinese policy makers’ decision
to return to monetary stimulus as a means of goosing the economy is largely
bullish news for risk assets. Less positive is uncertainty over Greece. Will Greece default?
Danske
Daily – Danske
Bank
Euro
rates update – Nordea
Eye-Opener – Nordea
PBoC cut
the reserve ratio * Little progress on Greece * New records in German yields * Will
continued solid sentiment indicators support the EUR?
Morning
Markets – TF
While the
market looks ahead to Friday's crunch meeting in the Latvian capital between Greece and its EU lenders, China takes decisive action by slashing
its bank reserve requirement ratio in an effort to avert a hard landing for its
increasingly fraught economy.
Daily FX
Comment – Marc
to Market
Greek and
Chinese Forces Drive Markets on Monday
Daily
Shot – TF
In the
event of a Grexit, any damage can be managed by the national central banks, and
the European Stability Mechanism. These institutions will be promptly
recapitalised. Such actions, however, will anger citizens of some member
states, whose taxpayers' funds will used to fix the damage caused by Greece. Given the chaos and the political
backlash such an outcome will generate, it's unclear when - if at all - confidence
in the currency union will be restored
Daily
Press Summary – Open
Europe
Deputy
Greek PM: Snap election or referendum are possible options if talks fail * Wohlgemuth:
Brexit “far more dangerous” for Germany than Grexit * Stubb ousted as
Centrists win Finnish elections – eurosceptic Finns could enter government * Former
IMF official: ECB acted ‘outrageously’ in Irish crisis *
US Open – ZH
China To The Rescue: Global Equity Market
Rebound After Latest Chinese Easing
FX
Update – TF
The USD is
on a weak footing to start the week, as market sees few catalysts on the
horizon to shift the US rate outlook. Meanwhile, the Euro
may have a negative correlation with risk appetite, meaning risky assets may
need to recover to see the Euro back lower.
From the
Floor – TF
USDJPY
looks like it is shaping up for a test of 118.40 that could conceivably usher
in a run all the way to 115 in a move that seems to sum up the relative
weakness of the greenback. Weakness is the name if the game in China too after the PBoC's surprise 100 bps
cut on the RRR.
Martin
Sandbu’s Free Lunch
– FT
Productivity
and politics: The UK's output per hour matters more than politicians' public
finance promises
FINNISH
Aamukatsaus – Nordea
Länsimaiden teollisuuden näkymät kirkastuvat | Kiina leikkasi pankkien
vakavaraisuusvaatimusta | Keskusta aloittaa hallitustunnustelut
Vaalit paisuttavat velkamyyttiä – Jan
Hurri / TalSa
Suurten puolueiden puheenjohtajat lupaavat painaa
velkajarrua ensi töikseen vaalien jälkeen, ettei "lapsillemme" jää
liian suurta laskua. Kotitalousjärkeilyyn vetoava velkakammo on kuitenkin
uhkapeliä: se voi tietää talousanemian pitkittymistä ja velkaisuuden
pahenemista.
Rusinat
talouspolitiikasta – Henri
Karjalainen / US
Millä saamme Suomeen kasvua ilman viennin apua? – Henri
Myllyniemi / US