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EUROPE
EU discusses narrow
British exceptionalism, not EU-wide reform – Open
Europe
A leaked draft of the
latest UK-EU deal suggests France and Germany are fighting UK demands on
banking regulation and the status of non-Euro states in the EU, while other
states don't want the UK benefit curbs to apply more widely. In effect, the
deal narrows the scope for EU-wide reform in favour of British exceptionalism.
Borrowing costs on
peripheral government debt are spiking, while those in Germany and the UK fall
to record lows as investors seek safe havens
Eurogroup warns Portugal on budget – Politico
Riksbank: The heat is on
– Nordea
Sweden: Riksbank goes
NIRP for longer – Danske Bank
Sweden Slides Further
Into NIRP, Cuts Rates To -0.50% - ZH
Why Sweden’s Negative
Deposit Rate Isn’t as Scary as It Looks – WSJ
UNITED STATES
Hapless Yellen was like
a deer trapped in the headlights * The present status is now crisis mode
Yellen Admits Fed Is Evaluating Possibility Of
Negative Rates – ZH
OTHER
Markets Weaken in Response to Concerns About Global Growth and Oil
Today we introduce our new EM FX Traffic Light. Each month, we attach a
red (highly risky), yellow (risky) or a green (less risky) Traffic Light to 33
different Emerging Markets currencies. The idea is to flag the currencies at
highest risk of coming under extreme pressure in the next six months. In the
January Traffic Light, the SAR is flashing red, while the CNY, NGN, EGP, HKD
and COP all get a yellow light. A green light does not rule out other risks
that are not covered by this model.
REGULARS
Yellen did little to surprise, risk
appetite collapsed, JPY aims for the Milky Way? * Risk appetite disappeared
quickly yesterday evening * US yield curve flattest since 2007 * More easing from
the Riksbank today?
Markets are braced for a second
blast of Congressional testimony from US Federal Reserve chief Janet Yellen
later today following yesterday's initial session.
Stocks Crater, Yen Soars
The Federal Reserve is
becoming more concerned about tight financial conditions the RMB devaluation
and global economic uncertainty. However Janet Yellen was not as dovish as some
had hoped for. Markets are questioning the Fed's credibility and see chances
for negative rates.
Matt Levine’s Money Stuff
– View / BB
Tusk: UK-EU negotiations
“very fragile” as French seek watered down provisions on banking regulation * Sapin:
Merkel and Hollande to present plan on future of Eurozone by end of 2016 * Italian
PM likens the EU to “the orchestra playing on the Titanic” * Leader of Merkel’s
sister party accuses her of tyranny on migration policies * NATO agrees to boost
Eastern European Presence * US and EU reach deal on derivatives regulation and
clearing house equivalence * Commission delays MiFID II implementation by one
year
Italy’s Eurozone push —
Latest Brexit deal — NATO surprise success
Markets Around The World Are
Crashing; Gold Soars
The markets were calling
for Yellen to deliver something to shore up market confidence but she entirely
failed and the markets have been losing faith in central banks’ ability to move
the needle anyway. The prime move on this remains USDJPY.
Equities and the dollar
fell while bonds gold and core bonds gained on Thursday after Fed chief Jan
Yellen's plain-vanilla testimony to Congress failed to inspire confidence in
worried markets.
FINLAND
& FINNISH
Ruotsi
elvyttää tänään * Euroopan osakemarkkinoiden laskuliike tyyntyi eilen * Yellenin
puhe veti jenkkikorot laskuun * Jenin vahvistuminen ei osoita hyytymisen
merkkejä