Really bad
numbers from Germany – retail sales far worse than
expected. This will begin playing a role in the coming elections. Talk that the
Fed will begin easing on the QE purchases sooner than currently anticipated.
What if the economy does not pick up in 2013? What will happen to the austerity
drive in Southern
Europe? Time
to start selling the EURUSD – FED approaches the limit, as Europe has no choice but to print, if the
crisis fires up again. I know that my long-term target has not been met yet (see my long-term view 21-Oct-2012).
Previously on MoreLiver’s:
Roundups &
Commentary
Frontrunning – ZH
The Lunch Wrap – alphaville
/ FT
Emerging N.Y. headlines – beyondbrics
/ FT
Daily press summary – Open Europe
Welt: Cameron is only the first to voice
necessity to establish new ideas for the relationship between eurozone and
non-eurozone countries; FAZ: Others will follow the British people to redefine
their place in Europe
Morning MarketBeat: Surprise! Citi Economic Index
Flashes Warning Signal – WSJ
Broker Note Briefing – WSJ
Quiet into Month End – Marc to
Market
Morning
Briefing (EU/US): A Conscientious Objector – BNY
Mellon
The ECB is facing pressure to to participate
in 'currency wars', much like it was in 2007
EUROPE
POLITICS
Elections in Europe 2013 – Place
du Luxembourg
Calendar
and voter intention surveys – France, Greece, Italy, Austria and Germany
The EU budget veto threat festival kicks off
again – Open
Europe
Summit devoted to negotiations over the 2014-2020 EU budget is only one week
away, and the sequence of veto threats may have just begun all over again.
Leveson: EU wants power to sack journalists – The
Telegraph
A EU report has urged tight press regulation and demanded that Brussels officials are given control of
national media supervisors with new powers to enforce fines or the sacking of
journalists.
EURUSD
Great Graphic: 2-Year Rate Differential and
Euro – Marc
to Market
Two drivers
discussed: yield differential and RoRo.
Euro’s Rally Likely Built on Sand – WSJ
The euro's
rally was never going to last that long, writes columnist Nicholas Hastings. -
BANKS
Europe's banks may no longer be in a
critical state - but the chronic headache of the debt crisis lingers on. In
Business Daily we hear from the man administering the medicine to Europe's financial institutions Michel
Barnier. And we ask if the organs keeping cash flowing through the continent's
veins can ever be nursed back to health.
The Bank of
Italy under former Governor Mario Draghi spotted accounting irregularities that
allowed Banca Monte dei Paschi di Siena SpA to mask losses more than two years
before the lender was forced to say it will have to restate profit.
UK
British
Prime Minister David Cameron intends to hold a referendum on his country's
future in the European Union. His predecessor Tony Blair tells SPIEGEL why that
is extremely risky and says it ignores the benefits EU membership has brought
to Britain.
Calls for EU Reform: Some German Politicians
Agree With Cameron –
Spiegel
A number of
politicians from Chancellor Angela Merkel's center-right coalition parties have
voiced support for British Prime Minister David Cameron's calls for a reform of
the EU. They say they agree with a number of points he made in his speech on Europe last week -- but are opposed to
granting Britain any further exemptions from EU
rules.
GERMANY
German
leaders are concerned that emergency euro-zone aid to Cyprus will merely serve to help the
Russian oligarchs who use the island nation as a tax haven. With pressure
growing to approve a bailout deal, however, Berlin now appears to be changing its
tune.
No sign of consumer boost from strong German
jobs market – Reuters
Annual fall
in retail sales biggest since May 2009. Low jobless, higher wages fail to lift
consumption. Germany eyes domestic demand boost as
exports weaken
SPAIN
Envelopes of Cash: Corruption Charges Put Madrid on Defensive – Spiegel
New
revelations about the corruption scandal that is rocking Spanish politics has
put conservative Prime Minister Mariano Rajoy and his party on the defensive.
Voters are beginning to lose patience.
Spain's Rajoy, ruling party
deny secret payment scheme – Reuters
Prime
Minister Mariano Rajoy and Spain's ruling People's Party denied on
Thursday that the party made payments from business donors to the premier and
other party leaders after a newspaper published what it said were secret party
accounts.
The papers
appear to show that PM Mariano Rajoy received €25,200 each year for 11 years.
Spanish Current-Account Surplus Grows on
Investment Inflows –
BB
Spanish deposit figures – alphaville
/ FT
There are
stories of deposits and capital returning… and we need to add further driving
factors to the headlines. What with the tax amnesty that unearthed some €40bn
of previously undeclared assets of Spanish residents, as announced by the
finance minister last week, and all.
Spain finds €40bn hidden in
sofa – alphaville
/ FT
It’s the
€40bn of previously undeclared assets of Spanish residents! The finance
minister announced last week that this was simply hiding in a sofa (or possibly
multiple sofas), and it wasn’t all that hard to find once they went to the
trouble of removing all the cushions. Or, something like that…
UNITED STATES
FOMC aftermath: No changes, weather blamed – TradingFloor
Juhani
Huopainen: The Fed's QE plane is approaching destination and has to land soon.
Yesterday's FOMC statement gave no new clues on the timing or method. Markets
are thus kept in uncertainty over QE’s longevity and left scrutinising Friday's
unemployment report.
Unsurprisingly, the Fed Stands Pat – Tim
Duy’s Fed Watch
As 6.5
percent comes closer - or if we see a handful of 200k+ nfp numbers - the Fed
will begin easing back on the asset purchases.
But I have trouble see that until mid-year at the earliest. For now, policy is on hold.
As we see a
strong recovery in Housing Starts, a level of 1.25 mn Housing Starts by this
summer would, by historical standards, mean a sharp improvement in Housing
Completions, that front run employment in construction. If (and yes, it is a
big if) we assume historical relations this type of move would imply a NFP of
+250 000 in 3 months
Stocks cruisin' for a bruisin' – Humble
Student of the Markets
Notwithstanding
the ugly GDP growth headline number, there are couple of ominous storm clouds
forming on the market's horizon. Here are some possible catalysts that could
create some volatility for equities in the days to come.
The
Japanese yen may drop to 100 against the U.S. dollar, but that still wouldn’t
address “the long-term structural issues” in Japan’s economy, says Steven Englander,
head of G-10 FX Strategy at Citibank.
OTHER
Investment Outlook: Credit Supernova! – Bill Gross
/ PIMCO
What has
followed has been a gradual erosion of real growth as layoffs, bank branch
closings and business consolidations create less of a need for labor and
physical plant expansion. In effect, the initial magic of credit creation turns
less magical, in some cases even destructive and begins to consume credit
markets at the margin as well as portions of the real economy it has created.
Things That Make You Go Hmm - Such As Currency
Wars – ZH