Previously on MoreLiver’s:
Follow ‘MoreLiver’ on Twitter
EUROPE
While the new bank
rescue fund will diminish the chances of near-term recapitalizations failing,
the outlook for the Italian banking sector remains grim. Especially, the banks
are burdened by considerable contributions to different funds. In addition, the
size of the fund is small and the problem of non-performing loans will be
solved slowly at best. The prospects of Italian banks supporting economic
growth any time soon look slim. We find more value in Spanish than Italian
government bonds.
The SEK has a tendency
to gain when the global business cycle improves; suggesting not hedging against
SEK gains may actually be lowering exporters earnings volatility. However,
experiences from the Euro Area, from Japan, and from the past (2013) suggest
that the SEK could gain substantially – even if global growth remains weak or
even takes a turn for the worse. Could the Riksbank actually lose control of
the SEK?
BoE does nothing ahead
of the EU in/out referendum
It’s Gotten So Bad in Europe, Even Eurocrats Begin
to Worry – Wolf
Street
“Demands for further escape referendums.”
In March the ECB eased
monetary policy substantially but markets took Draghi’s words as hawkish. This
time will be different: no action on 21 April, but a dovish outlook that aims
at keeping easing expectations alive. The balancing act consists of being
dovish without being unrealistic and without letting fiscal and structural
policy off the hook. We expect a mildly positive market reaction from the ECB’s
point of view, i.e. some EUR weakening and pricing of lower rates.
Many claim that monetary
policy has hit diminishing returns. They use that as an explanation for the
slower economic growth and low inflation in the Eurozone. This column argues
that the main problem is that the ECB acted late and with half-measures to the
Global Crisis, which was seen as falling short of its promises. The real problem
is thus not a lack of ammunition, but a lack of credibility.
UNITED STATES
The Fed’s pursuit of
unconventional monetary policy in a polarized era has diminished political
support for the Fed - weakening the nation’s recovery from crisis and sowing
doubt about the Fed’s capacity to fight the next recession.
OTHER
IMF
ANNUAL MEETING
Public debt ratios have
worsened almost everywhere and public finances have become more vulnerable * Countries
need to adapt, but “no one-size-fits-all” * Fiscal policy should be
growth-friendly with a focus on measures that boost both short- and medium-term
growth
March has been a very
good month for Asia FX and EM Asia equities. This is mainly attributable to two
of the largest risks, a meltdown of the Chinese economy and the Fed rate hikes,
have not (yet) materialised. However, these risks are likely to return to cloud
the region later this year.
The New Face of the IMF’s Global Growth Strategy – WSJ
Canada's new Liberal
government embraces the IMF prescription for global economic health
REGULARS
Equities up, Brent and 10Y Bund
yield slightly down * BoE dovish and on hold today, stable US inflation * Core
yields range-bound yesterday * Could the Riksbank lose control of the SEK?
Upbeat Chinese trade data gave US
and European markets a lift overnight and lifted sentiment across Asia as well.
In Australia the S&P/ASX200 rally rolled on supported by the banks and
miners. Leading Aussie miners were buoyant on yet another rise in ore prices
which in turn supported the benchmark.
Greenback Steadies Against Majors,
but Firmer vs EM After MAS Surprise
US consumption: more or less where
it "should" be
Investors surprisingly
became very interested in Italian banks which surged more than average in a
sector that had a strong day. This is despite plenty of warning signals from
institutions such as Fitch.
Corbyn sets out
socialist, ‘warts and all’ case for staying in EU * YouGov poll puts EU
referendum neck and neck as ‘short’ campaign gets underway * French Finance
Minister: Germans “shouldn’t give up the good habit” of respecting ECB
independence * Poland’s constitutional crisis deepens as MEPs back resolution
warning of threat to “democracy, human rights and the rule of law” * Tusk
describes migrant crisis as “something like a never-ending story” * Greece to
seek fixed rate on bailout loan repayments at IMF Spring meetings * Dutch PM to
coordinate with EU partners on voters’ rejection of EU-Ukraine agreement * EU-Japan
Summit postponed after trade negotiation disputes * EU data protection
regulators raise concerns about new US-EU data sharing agreement
EU-Japan summit nixed —
Big spending on limos and PR
U.S. Futures Flat After Oil Erases
Overnight Losses; Dollar In The Driver's Seat
FX Update – TF
The early European
session today finds crude oil struggling in an increasingly nervous market and
equities narrowly mixed despite a strong showing in both Wall Street and Asia
overnight and government and corporate bonds alike ploughing higher amid
enhanced risk appetite.
FINLAND
& FINNISH
Elvytyspolitiikka
pumppaa Kiinaan vauhtia * Tänään luvassa USA:n inflaatioluvut * USA:n
vähittäismyynti tuotti jälleen pettymyksen * EURUSD painui USA:n
inflaatiolukujen lähestyessä
Minkälaisia
mahdollisuuksia on parantaa euroalueen taloudellista kehitystä, ja ovatko
ylipäänsä nykyiset Euroopan talous- ja rahaliitto EMU:a koskevat säännöt tällä
yhteisvaluutta-alueella toimivia. Aiheesta keskustelee ekonomisti Roger
Wessman. Ohjelman toimittaa Maija Elonheimo