Eurozone

All Eyes On Washington: US Futures Rise On Hope Healthcare Vote Will Pass

Asian shares and S&P futures rose on optimism that today's rescheduled U.S. vote on health care will pass following Trump's Ultimatum to the Freedom Caucus. European stocks gave up some of Thursday’s gains, falling for the fourth time in five days, and moving further away from a 15-month high reached a week ago while the yen weakened for the first time in nine days.

Italy Falls Out Of Love With The Euro: Beppe Grillo Resurgent In The Polls

Recent polls for Italian politicians supporting the eurozone and EU have collapsed. Pro-Europe polls are highly likely to get worse as a  further splintering of Matteo Renzi’s PD party takes place. It is not out of question for Beppe Grillo’s eurosceptic Five Star Movement (M5S) party to achieve an absolute majority in the next election...

Will Thursday's Final TLTRO Finally Spark Carry Trades?

On Thursday, the ECB will hold its fourth tender under the TLTRO-II (Targeted Long-Term Refinancing Operations) programme. A large take-up is expected. A poll published by Reuters had a  median forecast of EUR 125bn net borrowing, with estimates as high as EUR 300bn. From a rates perspective, what matters is whether these funds will trigger flows into the bond or swap markets as banks set up carry trades.

Dijsselbloem Must Go, But That Solves Nothing

The EU in its present form cannot continue, and any options that would have allowed reforming it have been closed off due to its very structure. That real problem is that people don’t get to vote for who controls Brussels. So even if Dijsselbloem is ousted, the powers that be, Germany, Holland, Finland, Austria, will simply appoint another one of their pawns in his place. 

Key Events In The Coming Week

The key economic releases this week are the new home sales report on Thursday and the durable goods report on Friday. In addition, there are several scheduled speaking engagements by Fed officials this week, including a speech by Chair Yellen on Thursday.

JPM: "Market Patience Could Quickly Run Out If Obamacare Repeal Stays Deadlocked Into April"

"Investors are staying calm but patience could quickly run thin if repeal/replace stays deadlocked into Apr. The Bottom Line for US stocks remains the same: ~$133-135 is still being penciled in for Washington-neutral SPX 2018 EPS and on that number the PE at ~2400 (~18x) is rich but not ridiculous (although to sustain prices north of 2400 Washington will have to add at least a few dollars to the $133-135 range which is why tax reform confidence is so key to justify further gains)."

Global Stocks, US Futures Slide Spooked By G20 Protectionist Shift; Dollar Drops For 4th Day

Global markets start the week mixed with Asian stocks rising (Japan was closed for holiday), European stocks sliding, weighed down by declines in oil-and-gas shares and banks, and S&P500 futures also down. The dollar fell to a six-week low, falling four days in a row for the first time since early November as G20 leaders scrap a long-standing commitment to reject all forms of trade protectionism.

Albert Edwards: This Is The Reason Why The Market Doesn't Believe The Fed Any More

"One reason why the market doesn't believe the Fed dots is that investors cannot conceive of Fed tightening to the point that it causes the stockmarket any serious damage. Time and time again over both this and previous cycles the Fed has backed off rate hikes as soon as the going got tough. Maybe that is why the S&P trades at such a huge PE premium to the rest of the world."

Greece: A Democracy In Crisis

"The Greek people have just about reached the limits of their strength...Bishop Ambrossios is urging people to revolt.. and rebellious citizens, will declare themselves against the entire political system, and take their fight not to the parliament but to the streets."