Consensus on US: no quick fix but an eventual compromise on fiscal cliff. Risk: a good solution will be found -> positive for risk assets.
Consensus
on Japan: demographics, trade balance, Japan is 'over'. Risk: BoJ turns into
inflation targeting -> positive for risk assets. BoJ will probably sit tight
this week - but that would only push expectations to December.
Consensus
on Europe: Greece will get the additional funding, Spain will eventually apply for the
bailout after elections or latest when bond rates start to peak. Risk: Troika
and Spain will not come up with a mutually agreeable
bailout term -> negative for risk assets, but this realization is still
weeks away.
Consensus
on ME: Regional ground war is probable, lessening appetite for risky assets and
keeping oil high. Risk: slightly higher oil and gold push quant models to buy
risk assets based on recent correlations. Either situation is solved by
last-minute concessions or a limited war starts, but it will not have much
effect on the larger scale.
Previously on MoreLiver’s:
16-Nov Weekender: Weekly Support (updated!)
Roundups
News
roundup – Between
The Hedges
The 6am Cut
London – alphaville
/ FT
Emerging
Markets Headlines – beyondbrics
/ FT
Reference
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
Economic
Calendar – Forexpros
MORNING BRIEFINGS
US housing
updates offer new perspective on whether last week's weak economic data was
distorted by Hurricane Sandy, and Italy's new industrial orders set us up
for anticipating manufacturing news later in the week from Germany and France.
It was a
quite orderly start to the week as trading got underway in Asia. The positive end on Wall Street
saw a mild risk bid emerge throughout the morning, but not aggressively so.
Market Preview: Eyes on US existing home sales data – Saxo Bank
European markets are expected to open higher Monday amid optimism that US lawmakers might reach an agreement to avoid the fiscal cliff. Meanwhile, markets will track EU construction output and US existing homes sales data slated today.
Market Preview: Eyes on US existing home sales data – Saxo Bank
European markets are expected to open higher Monday amid optimism that US lawmakers might reach an agreement to avoid the fiscal cliff. Meanwhile, markets will track EU construction output and US existing homes sales data slated today.
Key news: US
fiscal cliff negotiations bolster risk appetite. The conflict between Israel and Hamas escalated Sunday. Danish
refinance auctions kick off today. Market movers today: US housing data, developments
in the Israel-Gaza conflict
Kreikalle vihdoinkin seuraava tukierä? * USA:n
teollisuustuotanto heikossa vedossa * Öljyn hinta jatkoi nousussa Israelin ja
Palestiinan välisen konfliktin myötä
Aamukatsaus – Tapiola
(pdf)
Osakemarkkinoilla positiivinen käänne viikon lopuksi, kun USA:n poliitikot luonnehtivat budjettikeskusteluja rakentaviksi (ns. Fiscal Cliff ongelmaan ehkä löytymässä ratkaisu). Perjantain heikot makroluvut USA:sta eivät haitanneet markkinoita. Osakefutuurit selvästi plussalla, indikoiden nousuavausta. Viikon tärkeimpiä tapahtumia neuvottelut Kreikan tilanteesta tiistaina ja euroalueen ostopäällikköindeksit ja Saksan IFO -indeksi viikon loppupuolella.
Osakemarkkinoilla positiivinen käänne viikon lopuksi, kun USA:n poliitikot luonnehtivat budjettikeskusteluja rakentaviksi (ns. Fiscal Cliff ongelmaan ehkä löytymässä ratkaisu). Perjantain heikot makroluvut USA:sta eivät haitanneet markkinoita. Osakefutuurit selvästi plussalla, indikoiden nousuavausta. Viikon tärkeimpiä tapahtumia neuvottelut Kreikan tilanteesta tiistaina ja euroalueen ostopäällikköindeksit ja Saksan IFO -indeksi viikon loppupuolella.
Markkinakalenteri – Nordnet
Markkinakalenteri – Taloussanomat
EUROPE
European Finance Chiefs Seek to Close Greek Gap
Amid IMF Spat – BB
The finance
chiefs are due to meet in Brussels tomorrow for the second time in a
week after they agreed seven days ago to keep Greece’s bailout aid flowing. In addition
to a disagreement between the European Union and IMF over softening Greece’s debt target, the ministers will
attempt to re-engineer the current bailout without asking taxpayers to put up
more money.
Germany, Holland, and the creditor states of
northern Europe have not lost a single cent on
eurozone rescue packages, so far.
"You
must tell your readers,” says Prof Gunther Schmid, one of Germany’s leading labour market experts,
leaning forward over the Berlin brasserie dining table to emphasise
his point. “It will be a disaster if Britain leaves the European Union.”
Should the Eurozone’s fiscal rules be
abolished? – mainly
macro
Eurozone
governments still do not know what to do if a future Greece emerges. How does it differentiate
between a future Greece (where default is required) and a
future Ireland (where it is not)? The answer at the moment
seems to be that the fiscal rules will ensure there will never be another Greece.
UNITED STATES
UNITED STATES
Putting the fiscal cliff in perspective – Sober
Look
Fiscal Madness – Tim
Duy’s Fed Watch
Such
worries have been repeatedly proved unfounded, but Greenspan and Fisher have no
other intellectual framework to fall back on.
When you only have a hammer, everything is a nail. For them, any question of fiscal policy
always needs to be twisted into their version of the world, even when the
opposite is so completely obvious to just about everyone else at this point.
If August 2011 Is The "Fiscal Cliff
Resolution" Template, Then Watch Out Below – ZH
Goldman: We
believe the proverbial ‘fiscal cliff’ ultimately will be avoided, but precedent
suggests any resolution will not happen until mid-to-late December…Last year
the S&P 500 fell by 17% between July 25th and August 8th as the US debt
ceiling deadline approached.
ASIA
BANK OF
JAPAN
Will the Japanese election stall the next BOJ
move? – Saxo
Bank
Research Japan: Bank of Japan is turning into a
dove – Danske
Bank (pdf)
Election
will increase pressure on BoJ for more easing * BoJ has already stepped up
easing substantially * Reshuffle of BoJ board gives ample room to influence
next year *
Abe threatens to turn
BOJ into an unlimited piggy bank for the government – Sober
Look
Yen Bears See
Vindication in New BOJ Under Abe Watch: Currencies – BB
CHINA
China's once-a-decade transition of power
is complete. The country's new supreme body, the Politiburo Standing Committee,
will now be led by Xi Jinping. The charming 59 year old almost seems like a
Western politician, but he is firmly committed to preserving the core dogma of
the Communist Party.
Chinese No Longer Bow to Autocratic Rule – Spiegel
The time of autocratic rule has
passed for China's Communist Party. At one time it was understood that the people would
obey, and everyone would get rich in return. But economic success will no
longer suffice. Now the Chinese are demanding freedom and security too.
OTHER
Monday: Existing Home Sales, Homebuilder
Confidence – Calculated
Risk
HY markets hit by outflows; correction likely
short-leved – Sober
Look
Betting with Trillions Prison of Debt Paralyzes
West – Spiegel
Be it the
United States or the European Union, most Western countries are so highly
indebted today that the markets have a greater say in their policies than the
people. Why are democratic countries so pathetic when it comes to managing
their money sustainably?
The Three "Financial Structure"
Paradigms Of Modern Finance – ZH
Key Global Event Risks For The Next Five Years
(The Known Unknowns)
– ZH
Ray Dalio on the Global Economy – Foreign
Affairs – Global
Macro Monitor
Hamas' Miscalculation: Why The Group Thought It
Could Get Away With Striking Israel – Foreign
Affairs
Two factors
pushed Hamas to ramp up its bombing campaign: belief that its strategic
environment had improved in the wake of the Arab Spring and competition from
Salafi groups.
IN FINNISH
Raimo Sailas ja Osmo
Soininvaara peräänkuuluttavat säästöjä ja sisäistä devalvaatiota – tyhmyri
Ilmeisesti itseaiheutettu katastrofi on mieluisampi
vaihtoehto kuin typerien päätösten peruminen
Japani ensimmäinen
uuden rahapolitiikan virallisesti käyttöön ottava maa – jos LDP voittaa vaalit – tyhmyri