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EUROPE
What is
it about German economics? – Simon
Wren-Lewis
The
continent’s inability to respond to changed circumstances is truly alarming
ECB’s
Mersch Downplays Danger From European Government Bond Yields’ Rise – WSJ
Cameron:
pursue an ambitious plan for reform at the June EU summit – Open
Europe
OTHER
Majors
& Scandies: FX forecast – Nordea
Our general
story for the macro economy and central banks remains intact. We have thus kept
most of our forecasts unchanged. We have merely decided to hike the near-term
EUR/USD forecast a touch reflecting the pair’s recent correlation with yield
spreads and the high uncertainty on bond markets.
EM FX: Financial
forecasts – Nordea
EM FX is
weakening in line with our forecasts, and we believe more general weakness is
likely ahead of the first Fed hike. Individual country characteristics will be
more important going into next year.
We have
kept most of our forecasts unchanged. We decided to keep our EUR/TRY forecast
unchanged with risks skewed to the upside despite Sunday’s election result. Recently,
we added 50 bp of rate hikes to the Brazilian key rate, and lifted our short-term
USD/INR forecast.
Majors
& Scandies: Central bank and rates forecasts – Nordea
Following
the recent jump we expect a renewed fall in EUR yields over the summer,
followed by a very gradual increase throughout the remainder of the forecast horizon.
The expected drop in German yields over the next few months should support US
bonds as well in the near term. Longer out, however, the Fed starting to
normalise policy and an economy showing increasing signs of price pressures
favour gradually higher USD yields.
REGULARS
Daily
Central Banks – WSJ
Hilsenrath’s
Take: Memories of 2013 ‘Taper Tantrum’ Return * Kocherlakota to Join University
of Rochester * ECB’s Mersch: Government Bond Yields Not a Threat * U.K. to Unveil Financial Market Reforms
* China Inflation Eases Amid Weak Economy
Daily
Macro – WSJ
With the Greece drama seemingly subsiding as the Mediterranean country and its creditors talk
about extending the bailout for another nine months, things have quieted a bit
in global markets. The most telling news of the day is that showing that
deflationary pressure in China is strengthening.
Morning
MoneyBeat Asia – WSJ
Morning
MoneyBeat Europe – WSJ
Danske
Daily – Danske
Bank
Global
Daily – ABN
AMRO
ECB weekly
purchase data show tentative signs of firmer pace…signalling QE likely to be
stepped up in June, while net supply will fade * Meanwhile, German economy
starts Q2 on a strong note
Eye-Opener – Nordea
More US
labour market strength today, but markets may be waiting for Thursday * German 10Y
steady before another run to 1% * FX in range until second part of the week
Morning
Markets – TF
China's inflation rate has dropped,
according to official data released this morning, raising concerns about growing
deflationary pressures as the economy cools.
Daily FX
Comment – Marc
Chandler
Dollar
Trying to Stabilize after Giving Back Jobs-Inspired Gains
Daily Shot – TF
China's love affair with stocks shows no
sign of letting up ahead of an important decision tomorrow on whether to add
the country's stocks to the MSCI Emerging Market Index.
Daily
Press Summary – Open
Europe
Greece
submits new proposal to creditors including demands for further funding * Cameron:
Too early to say definitively whether collective responsibility will apply
during EU referendum * Four Presidents’ Report on Eurozone integration
envisages independent fiscal watchdog and European Monetary Fund * No decision
on EU refugee plan until September * Helle Thorning-Schmidt’s centre-left bloc
in the ascendency ahead of Danish elections * EU and US warn Kremlin of further
sanctions * IMF raises growth forecast
for the Spanish economy * European Commission expands tax rulings probe * Romanian
Prime Minister embroiled in corruption charges faces calls to resign
US Open – ZH
European
Stocks Suffer Longest Losing Stretch In 2015; US Futures Down
FX
Update – TF
A broad
equity market selloff is the possibly the main culprit behind a weak greenback,
with most of that weakness concentrated against EUR, CHF and JPY. As long as
the market mood remains sour, the risk of a weak USD and possibly even weaker
commodity currencies may persist.
From the
Floor – TF
China's stock market bubble could be a
boon for gold if it bursts, while elsewhere, it's the weakening USD that's got
markets flustered. When it comes to bonds, European yields are climbing higher
led by the periphery.
FINNISH
Aamukatsaus – Nordea
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