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EUROPE
In February, loan
interest rates in the Euro area continued their declining trend after the
surprising rise in January in some countries. This is a relief for the ECB
which wants to see its loose monetary policy and even negative rates
transmitted to the real sector.
Greece, the IMF and
Germany point the finger as WikiLeak ends in acrimony – fund suggests impasse
could run to July. Meanwhile, Portugal faces a potential downgrade by the end
of this month which could make its bonds ineligible for ECB purchases while
Spain needs to form a government by 2 May or face new elections at the end of
June which is around the time of the Brexit referendum.
UNITED STATES
The Fed seems to have
made a dovish shift to its reaction function. As a result, we have changed our
Fed call, seeing now only one rate hike in 2016. However, we now expect four
rate hikes in 2017, up from three in the old baseline. Our new forecast sees a
steeper US yield curve later this year as markets start to price in a growing
risk of Fed falling behind the curve. We have lifted the EUR/USD forecast
between now and mid-2017 but keep a profile of a stronger USD down the road.
OTHER
Risk are easing, but
managed regimes still at risk. The SAR flashes red for the 16th month out of
the past 17, while the NGN, TWD, KZT and HKD all get a yellow light.
PANAMA
PAPERS
About the Panama Papers
– Süddeutsche
Zeitung
Politicians Should Keep
Their Money at Home – View
/ BB
REGULARS
Low risk appetite, new Fed and
EUR/USD forecast * Today focus on ISM data * Flatter Bund curve * Brexit
worries weighing on the GBP
Asian stocks were mixed on Tuesday,
and oil's slide persisted. Japanese stocks tumbled on fears that the strong yen
would dent corporate earnings. But Chinese shares headed higher as trading
resumed after a public holiday on Monday. And in Australia, the RBA kept the
cash rate unchanged at 2.0%, as expected, but the bank's comments on the
currency stoked the Aussie dollar.
How about a nice warm cup of...
An iron pyrites of market crashes.
Daily Shot – TF
With risk sentiment on
the wane forex traders are rushing into the Japanese yen despite central bank
warnings. The resulting rally has decimated the benchmark Nikkei 225 index.
Matt Levine’s Money Stuff
– View / BB
New poll finds support
for ‘Remain’ picking up * Cameron: Brexit would entail deliberately choosing a
second-rate, more restrictive trading relationship with our biggest market * New
poll: Majority of French, Germans and Italians in favour of reintroducing
border checks * Returns of migrants under EU-Turkey deal begin * Süddeutsche
Zeitung: Failure of EU-US free trade deal is becoming a real possibility * European
Commission responds to Panama papers saying there is “plenty more to come” in
cracking down on tax avoidance
Tusk talks — Trump tanks
— Panama big bang and slow burn
US Open – ZH
"Risk Off" - Global Stocks
Slide As Yen Surges To 17 Month High; Bund Yields Plunge
Frontrunning – ZH
USDJPY continues to
trade heavily with weaker risk appetite a key driver, and now we’re having a
look at the lows for the cycle. Elsewhere, AUDUSD is in a key short-term pivot
area after what appears to have been a half-hearted RBA reaction to a stronger
AUD.
Bank of Japan governor
Haruhiko Kuroda was out last night telling markets that further easing remains
a distinct possibility, but this did nothing to restrain the surging yen. Thjis
morning sees USDJPY plunging towards the 110.00 handle as oil prices remain
soft and the Aussie vacillates on a neither here-nor-there RBA statement.
FINLAND
& FINNISH
Siirtyvätkö
varat patjan alle? * Nordean uusi ennuste: Fediltä luvassa vain yksi koronnosto
tänä vuonna * EKP:n löysä rahapolitiikka välittyy reaalitalouteen * USA:n
palvelusektorin luottamus elpyy