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Monday, April 15

15th Apr - US Close: JPY, Gold, Europe



Risk markets feeling bad - JPY stronger across the board, AUDUSD down with gold. Friday's "EZ periphery central banks must sell their gold" is a major reason, so is the US warning on Japanese monetary policy. I think it is too early for a 1998-type of a scenario in the JPY (JPY strengthened by 12% in a matter of days). Perhaps the G20 and IMF meetings on Thursday and Friday will put a bottom to the EURJPY and USDJPY. And, oh yes, bad views on Europe, but that's nothing new.



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EUROPE
German ghost of inflations past haunting European stability: PosenMacroScope / Reuters
What did the former UK Monetary Policy Committee member mean? Quite simply, that the types of structural economic changes that Germany has been pushing on the euro zone are not only destructive but also bound to fail, at least if history is any guide.

The non-puzzle of peripheral painFree exchange / The Economist
And so the euro area might just choose to lock up bits of euros here and there and selectively reduce their value. That is what happened to many of the euros locked up in loans to the Greek government. And it is what happened to many of the euros that were sitting in insured deposits in Cypriot banks. Who knows where it might happen next! (Nowhere, say euro-area officials, entirely unconvincingly.) The rub is that doing something like that on the scale necessary to end the crisis probably, basically, more-or-less means the end of the euro area.

Why euro zone bond yield ‘convergence’ may be something to fearMacroScope / Reuters
In normal circumstances, this might suggest markets are no longer discriminating between the risks associated with different member countries’ bonds. But analysts say the recent convergence is based on a precarious belief of ECB action rather than any real improvement in economic fundamentals.

Why is Austria so keen on bank secrecy?euobserver
Privacy concerns and the fear of losing big money from abroad are the main reasons why Austria is still holding out against an EU scheme to lift bank secrecy in Europe.

ASIA
China’s Growth Slows in 1Q: Only the Beginning?The Diplomat
 
GOLD
Spotted, the once in a 2 million year ‘Golden Swan’?alphaville / FT

Gold: The fear bubble burstsFelix Salmon / Reuters

Gold Sinks Most Since 1980, Stocks Sinks Most This YearBB

The Price of Gold Is Crashing. Here's WhyBusinessweek

Gold Plummets By Most In 30 Years, Stocks Have Biggest Drop Of 2013ZH

Gold Crashes Most in 30 Years … What Does It Really Mean?Washington’s blog

What Happened The Last Time We Saw Gold Drop Like This?ZH

Outflows in Gold ETFs Surge as Traders BoltWSJ

Despite Gold Selloff, Options Traders Bank on ReboundWSJ

OTHER
Posen: ‘Central bankers can’t spot bubbles, ok?’alphaville / FT