15th Dec - EURUSD finally breaks 1.05

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EUROPE

View: Europe Tries to Wish Away Its Next Refugee Crisis – BB

A deal with Turkey to control illegal migration is weakening. The backup plan is weaker.

Austrian proposal for an Australian migration solution – Politico

Sebastian Kurz pushes crackdown, reflecting a political shift to the right across EU.

Member States‘ election calendar likely to take centre stage – Deutsche Bank

The EU agenda 2017 will be dominated by national elections and the managment of possible fall-out from the course of European politics.

The December European Council - Another Toxic Summit – euinside

5 things to watch at the EU summit – Politico

Carney Said to Meet at ECB as Central Banks Seek Brexit Help – BB

Bank of England governor to attend ECB’s General Council * European policy makers looking for clues on economic spillover

Brexit negotiations will be led by national governments – Open Europe

Greece cannot be condemned to austerity for ever – FT

Myths about the country’s rescue package must be confronted, writes Pierre Moscovici

Macroeconomic stabilization, monetary-fiscal interactions and EMU – ECB

 

Flash Eurozone Composite PMI – Markit

Flash Germany Composite PMI – Markit

Flash France Composite PMI – Markit

Flash PMIs: Manufacturing leading growth – Nordea

Euro-Area Maintains Momentum as Weaker Currency Helps Factories – BB

UNITED STATES

Editorial: Russia's Hacking Warrants an Independent Inquiry – BB

US Economic Outlook: The Trump boom? – Nordea

Our updated forecast is based on the assumption that Trumponomics will provide a net boost to growth, inflation and interest rates. But risks to the outlook are significant.

White House Economists: Four Most Stubborn Economic Challenges – WSJ

Recent slowdown in productivity growth, income equality, low labor force participation rate, economic sustainability.

CPI: headline index creeps higher; core index tame – Daiwa

NAHB: Builder Confidence increased to 70 in December – Bill McBride

Flash US Manufacturing PMI – Markit

  FEDERAL RESERVE

Fed Turns Hawkish – Tim Duy

Sentiment shifting toward a modestly more hawkish stance a few months ahead of my schedule.  Policymakers finally see the light at the end of the tunnel.

FOMC review – Daiwa
Stable economic forecasts; apparently no assumption of fiscal stimulus. Nevertheless, more tightening envisioned next year

Dollar Takes Flight on 2017 Fed Rate Path; Bonds, Gold Decline – BB

Fed lifts rates, sees faster pace of hikes in Trump's first year – Reuters

Yellen Takes Post-Hike Victory Lap With Labor Market Great Again – BB

She says fiscal stimulus not needed to boost U.S. employment * Policy gradualism still in play as Fed waits Trump’s plans

Fed revises rate projections higher: ours remain unchanged – Pictet

Martin Enlund’s USD: Icarus Yellen? – Nordea

The Fed talking tough opens up for further near-term USD gains, but the greenback's tailwinds are still likely to slacken in Q1. Will global markets positively digest this hawkish message; or will something break? The latter is usually the case.

El-Erian: Fed Day Commentary Seen From a Distance – BB

 

OTHER

The themes (and risks) that will shape markets in 2017 – BlackRock

Noah Smith: When to Send an Investing Model Into Retirement – BB

What are populist policies? – Simon Wren-Lewis

Barry Ritholtz: Put Forecasting in Its Final Resting Place – BB

Forex trading ain’t what it used to be – FT

IMF Paper Lays Out Framework to Assess Fiscal Space – IMF

Flash Japan Manufacturing PMI – Markit

REGULARS

Danske Daily – Danske Bank

Eye-Opener – Nordea

Fed (over)delivers, USD and rates jump, other major central banks to stay on hold * No changes expected from Norges Bank, BoE and SNB * USD short rates jump more than 10 bp on a slightly hawkish Fed hike * The EUR/USD tests 1.05 amidst broad USD strength

Morning Markets – TF 

The Fed's rate hike decision may have been expected but it was the three-hikes plan for 2017 that really sent shockwaves across markets. Dollar has blasted its way upwards leaving carnage in its wake.

Euro wrap-up – Daiwa

Daily Market Comment – Marc Chandler

Greenback Extends Gains on Back of Fed

Daily Market Comment – Macro Man

Daily Press Summary – Open Europe

http://openeurope.org.uk/today/daily-shakeup/

Brussels Playbook – Politico

US Open – ZH

Dollar Surges, Yields Soar, Euro Tumbles To 13 Year Low As Markets React To Hawkish Fed

Frontrunning – ZH

FX Update – TF

The FOMC delivered a relatively hawkish jolt to the market yesterday as the Fed adjusted its rate forecasts for the near term higher. But it was clear in the Yellen press conference that the Fed is very uncertain of its path forward admitting that visibility (does it ever have visibility?) is clouded by the unknowable fiscal outlook but clearly playing defence in case Trump brings home the fiscal bacon.

FINNISH

Aamukatsaus – Nordea

Fed toimii - muut odottavat * Emme odota Ison-Britannian, Norjan ja Sveitsin keskuspankeilta toimia tämän päiväisissä kokouksissa * Euroalueen joulukuun alustavat ostopäällikköindeksit hienoisessa nousussa * USA:n inflaation odotetaan kiihtyneen marraskuussa

Euro ei pelastu pankkiunionilla ja rahastoilla – Eurothinktank

Eurojohtajat: pankkiunioni pelastaa – EuroThinktank: ei pelasta – Suomen Uutiset