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EUROPE
Ashoka
Mody: David Cameron and the EU’s Waterloo – Project
Syndicate
The UK,
whose new majority Conservative government has pledged to hold a referendum on
EU membership by the end of 2017, is at the vanguard of Europe’s institutional
atrophy. Even if the UK stays, it will continue to move steadily away from
Europe; and, unless EU leaders understand why, most European countries will
follow suit.
Despite
the crisis, Portugal’s 2015 election will be a straight contest between the
country’s two mainstream parties – Europp
/ LSE
Euro
area Economic Outlook: A stable but not really strong recovery – Nordea
We confirm
our forecast for GDP growth: 1.3% this year and 1.6% in 2016. With these
numbers, we are below the consensus forecast and the ECB’s projections. On a
country level, the recovery will remain fairly broad based. Private consumption
should continue to be the main growth driver while capital spending remains the
missing link for a stronger recovery. The benign inflation outlook offers the
ECB leeway to support the recovery for a long time.
Spain’s
“beautiful deleveraging” shows euro area’s limitations – FT
Despite
doing (basically) everything right, Spain’s membership in the euro has left it
at the mercy of forces far stronger than anything even the most competent and
responsible national institutions can handle.
European
banks: Healing continues – DB
Research
European
banks had a successful start into 2015. Business activity improved, asset
quality did so as well and profitability rose again, as the rebalancing of the
industry made further progress. The ECB’s new large-scale market interventions
helped strengthen sentiment in financial markets, and contributed to the
continuing decline in the euro exchange rate – which on balance may have been
beneficial for banks.
EUROPEAN CENTRAL BANK
You
Think Rising Eurozone Yields Are a Problem? Consider This… - WSJ
ECB's
Coeure says any euro exit would be warning for Europe – Reuters
The
departure of any country from the euro zone would be a warning sign for Europe,
adding that he expected Greece to stay inside the currency bloc.
News in
Charts: This Is Not The End Of ECB QE… - Alpha
Now
Despite a
few straws in the data, the euro area recovery is far from established. Consequently,
it is far too early to be thinking about ECB drawdown – there is plenty more QE
to come.
GREECE
UNITED STATES
Survey: Fed
Forecasts for the Economy and Interest Rates Could Edge Down – WSJ
Survey: Economists
Think Fed Won’t Raise Rates Before September – WSJ
RETAIL SALES
Retail
Sales increased 1.2% in May – Bill
McBride
Americans
Finally Went Shopping in May – WSJ
US retail
sales jump 1.2% in May – TF
Retail
sales jump in May, brighten growth outlook – Reuters
Retail
Sales Rise, Economists Feeling Better About the Economy – WSJ
OTHER
Great
Graphic: German Bunds, Inflation Expectations and the Euro – Marc
Chandler
The Big
Picture: Reflation theme building – Danske
Bank
China and
the US to pick up the pace after weak Q1, euro-area recovery continues * A
reflation theme is building - global growth recovers alongside rising inflation
* Output gaps close faster than expected due to fall in potential growth rates
* The Fed hiking cycle should be slow - but not as slow as the market expects *
ECB to continue QE until September 2016 but exit talk set to start earlie
Shaken,
rotated, positioned
– FT
Barclays
have had a look at the reaction of various types of investor since markets
started to move around with energy in April.
Steen
Jakobsen’s Macro Digest – TF
Forget the
1930s, inflation is different this time * Real rates are finally coming off in
the US * More and more pundits see inflation ticking
higher * A summer of European growth – and hell afterwards * ECB's balance
sheet as % of GDP little changed despite QE * The credit cycle has clearly
peaked
Recap
2015-06-10: FCI, Historical Analog – Global
Macro Trading
One of the
things that have been unusual about recent market moves is that credit spreads
has not been tightening with the move up in global risk free yields. Here is a
chart of the US long term BBB yield vs the 30yr Treasury yield. Note that
unlike what happened during the Taper Tantrum, where credit spreads were
broadly stable or even tightened, over the past 6 months, spreads have
unambiguously widened.
REGULARS
Daily
Central Banks – WSJ
Douglas’ Take: While Open to Tweaks, Carney
Sees Liquidity Staying Expensive * ECB’s Weidmann Says Risk of Greek Insolvency
Increasing Daily * For Japan, Exiting Stimulus Will Be a
Delicate Balance * South Korea Cuts Interest Rate as Fears of MERS Economic
Toll Mount * New Zealand Central Bank Cuts Key Interest Rate, Signals More
Easing
Daily
Macro – WSJ
Greece Gets Emergency Aid; South Korea, New Zealand Cut Rates
Morning
MoneyBeat Asia – WSJ
Stocks Jump
After Signs of Progress on Greece
Morning
MoneyBeat Europe – WSJ
Greek
Headlines Likely to Dominate Once More
Stocks
Bounce Back. Is More Buying In Store?
Danske
Daily – Danske Bank
Global
Daily: Five factors the ECB will watch – ABN
AMRO
ECB QE has
been a dominant theme in markets – the timing of QExit will also be a big deal
* We set out the five big factors the Governing Council will be looking at to
decide on policy…they are growth momentum, inflation, financial conditions, Fed
rates and Grexit
Euro
rates update – Nordea
Eye-Opener – Nordea
Still
higher yields, never-ending Greek saga, US retail sales: Signs of life among
US consumers? * German 10-year yield breaches 1% * USD/JPY with a big move
lower on the back of Kuroda’s comments
Morning
Markets – TF
Today's
data calendar is packed with key releases, with investors keenly awaiting
retail sales and sentiment figures that will either quell or amplify fears
about US consumer spending.
Daily FX
Comment – Marc
Chandler
Will a
Strong Retail Sales Report Help the Dollar?
Daily
Shot – TF
New Zealand's rate cut may have shocked
markets, but South Korea's move was broadly expected. Both
economies, however, face similar pressures in the form of weaker exports,
flagging manufacturing and disinflation.
Daily
Press Summary – Open
Europe
Osborne:
New EU settlement must protect integrity of single market * Further round of
talks between Tsipras, Merkel and Hollande yields no breakthrough * Austrian
Foreign Minister: We should “face” Treaty change * Die Welt: Brexit more
dangerous for Germany than Grexit * Italian Finance
Minister calls for Eurozone unemployment insurance scheme * Polish PM forces
senior politicans to resign to arrest falling support
US Open – ZH
Futures
Flat As Latest Greek Euphoria Questioned; Chinese Economy Bounces In Night Of
Rate Cuts
Frontrunning – ZH
FX
Update – TF
The RBNZ
cut rates as only a minority of analysts expected and unveiled a firmly dovish
message that took Kiwi on a nosedive to 0.7000 in NZDUSD overnight. Today’s US
Retail Sales is the economic calendar highlight of the week.
From the
Floor – TF
Rich
pickings for From the Floor today with that NZD plunge overnight, the bund's
continued woes and the growing possibility perhaps of a Fed rate hike in
September all vying for front-page attention.
FINNISH
Aamukatsaus – Nordea
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