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EUROPE
Peter
Spiegel: The big eurozone overhaul may not be so big – FT
The report
being pulled together may propose little more than a bit of euro housekeeping
in the near term. Although more ambitious plans could be included, the leaked
documents show they will be relegated to the medium and long term – a tried and
true EU tradition that is normally a recipe for bureaucratic burial.
How is
the weak euro affecting different sectors? – DB
Research
At sectoral
level, the positive effects of the euro's current weakness are clearly
outweighing its drawbacks.
Spain:
No country for absolute majorities – Open
Europe
The latest
string of Spanish regional and local elections yielded a fragmented political
landscape. The two big traditional parties suffered losses, while the two main
newcomers - the anti-establishment Podemos and the centrist Ciudadanos - now
hold the key to stable governments in most Spanish regions
Why
Greece’s Negotiators Can’t Afford to Ignore Spain Now – WSJ
Why some
parties respond to Eurosceptic public opinion while others don’t – Europp
/ LSE
Several countries
have experienced a rise in Eurosceptic public opinion since the start of the
financial crisis, but what effect does this change in attitudes have on the
platforms of political parties? Christopher Williams presents findings from a
study of party positions in European Parliament elections. He writes that while
some parties do respond to Eurosceptic public opinion by adopting a more
critical stance toward the integration process, this effect is not uniform
across all parties.
UNITED KINGDOM
Cameron
to Juncker: EU ‘must change’ – Politico
Gideon
Rachman: Cameron, Europe and the hand of history – FT
Britain has
always tried to be a European and a global power
Janan
Ganesh: The cold-blooded case for staying in Europe – FT
If the In
campaigners are traduced as bloodless accountants, they know they are on to a
winner
Mark
Carney Loads Up Shotgun Format for BOE’s Super Thursday – BB
Carney is
overhauling a process that’s almost two decades old and will present
interest-rate decisions, voting records and the quarterly Inflation Report
simultaneously, rather than spread over the current two weeks.
Cameron
humiliated as France and Germany tighten grip on Europe – The
Daily Mail
GREECE
Greece's
half-baked solutions no longer palatable – TF
Greece
Could Bundle Its Next IMF Payments to Buy Even More Time. But at What Cost? – WSJ
A
parallel currency for Greece: Part I – vox
To prevent
it from defaulting on its debt, the Greek government might need to introduce a
new domestic currency, in parallel to the euro. This column, the first in a
two-part series, compares the current proposals for a parallel currency and
discusses how such a policy instrument could promote economic recovery.
A
parallel currency for Greece: Part II – vox
Introducing
a currency in parallel to the euro could help Greece repay its external debt
and resume economic activity. This second column in a two-part series evaluates
the different options and their effects on aggregate demand and fiscal
sustainability. The authors propose a tax credit certificates programme, which
they argue could generate new spending capacity and avoid the adoption of new
austerity measures.
Yanis
Varoufakis: Austerity Is the Only Deal-Breaker – Project
Syndicate
Greece's
government is eager to implement an agenda that includes all of the economic
reforms that its creditors expect, and is uniquely able to maintain the
public’s support for a sound economic program. What it will not do is embrace a
cure – deeper austerity – that kills the patient.
Can’t
pay, won’t pay – Reuters
Varoufakis
has a point –Greek crisis mostly about the collapse of NGDP – Lars
Christensen
Paul
Krugman: Grexit and the Morning After – NYT
EUROPEAN CENTRAL BANK
Citi: ECB's
Bizarro QE Taper May Add To Summer Bond Market Volatility – ZH
Ilargi:
Mario Draghi’s Slippery Downward Slope – Yves
Smith
UNITED STATES
The
residual seasonality puzzle – Bruegel
While
seasonal adjustment is generally considered uninteresting, the repetition of
low first quarter GDP releases since 2010 has led many to wonder if a
predictable seasonal pattern remains in the published data. The U.S. Bureau of
Economic Analysis is investigating the issue and will report on its findings in
July.
Gavyn
Davies: Technology, inflation and the Federal Reserve – FT
There is no
certainty here — the official data might be right. But an increasing number of
economists from across the spectrum believe that the possible under-estimation
of productivity growth could lead to a major policy mistake.
The
taming of the Fed’s balance sheet – FT
The exact
timing of the Federal Reserve’s first interest rate rise is uncertain, but even
less clear is what will happen to the $4tn pile of bonds the central bank
amassed during the financial crisis.
DATA
Case-Shiller
Home Prices Rise Over 5% YoY To 7 Year High – ZH
Case-Shiller:
National House Price Index increased 4.1% year-over-year in March – Bill
McBride
New Home
Sales Rebound Despite Median Price Rising To Just Shy Of All Time High – ZH
New Home
Sales increased to 517,000 Annual Rate in April – Bill
McBride
Comments on
New Home Sales – Bill
McBride
Durable
Goods Slide YoY 4th Month In A Row Despite Dramatic Upward Revisions – ZH
US Services
PMI Slides To Lowest Since January – ZH
Stocks,
Bonds, Commodities Tumble On Durable Goods "Good News", USD Soars – ZH
OTHER
Max
McKegg : Dollar rally regains strength on inflation and Yellen speech – TF
The markets
took US Federal Reserve Chair Janet Yellen's speech to signal the FOMC will not
wait to see “the whites of inflation's eyes” before firing the first bullet,
and a lift-off in September is looking more likely. There was no change to the
party line in ECB President Draghi's speech or in BoJ policy, both of which
support the dollar against the euro and yen.
Four
Things that Happened Monday You should Know About – Marc
Chandler
George
Magnus: Investors are playing a ‘greater fool’ game – FT
Market
anomalies abound as debt levels rise and interest rates stagnate
Global
FX Strategy: summer time sadness for the bulls – Nordea
We expect
the USD to rebound as the US data improves and the Markets start pricing in the
Fed hike in September. The relief for the Emerging Market currencies will
likely be disturbed by that as well. The GBP strength won’t last, as
post-election risks will prevail, possibly making the BoE keep the rate path
lower. The JPY weakening resumes…but uncertainty growing. The SNB will have to
intervene more to fight the CHF strength.
G-7
Finance Officials to Discuss Loose Monetary Policy Risks – WSJ
REGULARS
Daily
Central Banks – WSJ
Hilsenrath’s
Take: Fed Confronts an Economy Plagued by Mismeasurement * Yellen: Fed on Track
to Raise Rates This Year * Fed’s Fischer Sees Short-Term Rate at 3.25%-4% in
Three to Four Years * G-7 Finance Officials to Discuss Loose Monetary Policy
Risks * IMF Official Says Chinese Yuan No Longer Undervalued
Daily
Macro – WSJ
The only
thing that’s clear is Greece doesn’t have any money or much time. But even if
some last-minute agreement is hammered out, that won’t be the end of the story.
Greece needs a comprehensive solution, including wholesale debt restructuring
and serious economic reform. Neither’s likely to be easy.
Danske
Daily – Danske
Bank
Eye-Opener – Nordea
Greece in trouble meeting deadline? * Fed
signals rate hike later in the year * Stronger dollar
Morning
Markets – TF
Today's
Distributive Trades Survey will shine light on the UK's retail spending for
May. If the data show optimism, this will have a bullish effect on sterling.
But consensus expects only a modest improvement.
Daily FX
Comment – Marc
Chandler
Dollar
Rallies in Asia and Europe, but may Pull Back in North America
Daily
Shot – TF
Major stock
markets are still doing well, in particular the one in Shanghai, but also the
US has for long not seen a bigger correction. Steel and soybeans on the other
hand are under pressure.
Daily
Press Summary – Open
Europe
France and
Germany reiterate position on Eurozone-led Treaty change as Cameron begins
European charm offensive * Syriza divided over Eurozone negotiations as Greek
government considers missing payment to IMF * German companies: “EU would hold
significantly less power” in the case of Brexit * Traditional parties suffer
heavy losses in Spanish local elections * Nationalist candidate triumphs in
Polish Presidential elections * Osborne considers Treasury study into costs and
benefits of EU membership *
US Open – ZH
Futures In
The Red On Europe Jitters Ahead Of Obligatory
Low-Volume Levitation
From the
Floor – TF
USDJPY has
finally broken out of the range in which it had seemed locked forever, and with
122.50 already gone, the potential path towards 124.00 is opening.
FINNISH
Aamukatsaus – Nordea
Euron halventuminen ei ole vielä ohi | Markkinat avautuvat
jälleen tänään eilisen vapaapäivän jälkeen | USA:n kestotavaratilausten
odotetaan kääntyneen kasvuun
Viikkokatsaus: Onko Saksan vauhti hiipumassa? – Nordea
Saksan tulevaisuuden odotukset laskeneet | Uusia työpaikkoja
luodaan | Saksan taloussykli eri tahdissa kuin muu euroalue
Radiohaastattelu Euroalueen talouspolitiikasta – Roger
Wessman
Henri Myllyniemi: Sijoittajat ihmettelemässä Eurooppaa
– US