HEADLINES EU Winter Economic Forecast: Outlook Improved But Risks Remain ECB's Jazbec: QE Could End Sooner Than Sept. 2016 ECB's Weidmann: Countries Must Bear Consequences Of Own Actions BoE Rates Left Unchanged, In Wait-And-See Mode Amid Infl. Woes EU's Moscovici: QE Is Significant Enough To Have Macroeconomic Impact CNB Keeps Interest Rates Unchanged, Confirms Exchange Rate Commitment Fed's Rosengren Sees No Clear Sign Inflation Trending Higher Japan Taps Reflationist As New BoJ Board Member Greek Bond Yields Jump After ECB Raises Stakes For Athens UK House Prices Jump Unexpectedly In January - Halifax Switzerland's Economic Experts Slash Growth Forecasts Pfizer To Buy Hospira In $17 Billion Cash Deal Sprint Corp. Posts Q3 GAAP Loss Of 60c/Share Siemens Said To Plan 7,400 Job Cuts As CEO Reduces Costs Fitch & Moody's Affirm BT Group Following EE Announcement Daimler 'On Upward Curve' After 10% Profit Jump AstraZeneca To Buy Actavis Lung Drugs As Q4 Earnings Fall Short Vodafone Posts Better Than Expected Third Quarter Sales COMMENTARY Buffett Says Tough For Fed To Lift Rates Given Strong Dollar Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said it would be “very tough” for the Federal Reserve to lift interest rates this year because of the stronger U.S. dollar. “That would exacerbate the problem,” Buffett said in an interview on the Fox Business network. “I don’t think it’ll be very feasible to do. I think it would have a lot of international repercussions.” U.S. economic growth, outperforming most industrialized counterparts, has helped push the nation’s currency higher than it’s been in more than a decade against currencies of six trade partners. That’s making it cheaper for Americans to buy imported goods and helping to lower inflation that’s already below the Fed’s goal, making it harder to boost rates. (Bloomberg – Continue Reading) Democracy Could Have Saved Europe From The Single Currency “Elections change nothing,” said Wolfgang Schäuble, Germany’s tough-minded finance minister. He was talking about Greece, but he could have been talking about the entire EU racket. The Europhile elites have a guarded and contingent attitude towards democracy. It has its place, to be sure, but it must never be allowed to slow the process of political integration. As the President of the European Commission, Jean-Claude Juncker, put it in response to Syriza’s election victory, “There can be no democratic choice against the European treaties”. He means it. In 2011, in order to keep the euro intact, the EU connived at the toppling of two elected prime ministers: Silvio Berlusconi in Rome and George Papandreou in Athens. Both men were replaced by Eurocrats who presided over, in effect, Brussels-approved civilian juntas. Although their regimes were called “national governments”, their purpose was to drive through policies that would be rejected at the ballot box. (CapX - Continue Reading) What The ECB's Move On Greek Government Debt Is Really All About In a press release that jolted the markets, the ECB announced that it will no longer accept Greek government debt as collateral starting next week. But this news is not necessarily a potential liquidity disaster for Greek banks. The Greek banking system is not particularly reliant on Greek sovereign debt as collateral. Figures from the Bank of Greece show that Greek financial institutions currently have about 21 billion euros of Greek sovereign exposure. Furthermore, this debt has already been subject to valuation haircuts of up to 40% when used as collateral at the ECB. All collateral that the Greek banks use for ECB operations that is not Greek sovereign debt is still perfectly good to use. This decision of the ECB is against the Greek sovereign, not the Greek banks. (ekathimerini – Continue Reading) Fitch: China's RRR Cut Less Of An Easing Than It Appears The 50bp reduction in China's reserve requirement ratio (RRR), effective on 5 February, is less of a policy easing than it appears, says Fitch Ratings. The measure compensates almost exactly for liquidity destroyed by cross-border capital outflows during 2014. Accompanying targeted-easing measures are in line with the authorities' practice in this easing cycle, going back to 3Q14. Latest data from the State Administration of Foreign Exchange (SAFE) indicates that net capital outflows in 2014 totalled USD96bn (CNY575bn). We estimate the 50bp RRR cut by the People's Bank of China (PBOC) to release around CNY570bn into the economy. Therefore, the liquidity effect of the broad-based RRR cut roughly balances out against the impact of capital outflows. Also notable is the PBOC's continuing with targeted-easing measures to lower borrowing costs in certain sectors of the economy, on top of the broad-based easing. The PBOC announced an additional 50bp RRR cut for smaller financial institutions focused on micro enterprises and agricultural lending, as well as a 400bp RRR cut for the Agricultural Development Bank of China (ADBC). We expect these measures to release approximately CNY101bn (USD16bn) in liquidity - CNY85bn for the smaller institutions and CNY16bn for ADBC. (Fitch – Continue Reading) DATA Markit Eurozone Retail PMI Jan: 46.6 (prev 47.6) UK Halifax House Prices (MoM) Jan: 2.00% (est 0.00%; rev prev 1.10%) UK New Car Registrations (YoY) Jan: 6.70% (prev 8.70%) Markit Germany Construction PMI Jan: 49.5 (prev 50.5) Markit Germany Retail PMI Jan: 52.3 (prev 51.7) Markit France Retail PMI Jan: 44.0 (prev 46.5) Markit Italy Retail PMI Jan: 41.2 (prev 42.8) Switzerland's Economic Experts Slash Growth Forecasts Swedish Industrial Production (MoM) Dec: 1.70% (est 1.00%; prev -0.20%) Swedish Industrial Orders NSA (YoY) Dec: -11.40% (prev 1.10%) Swedish Service Production (MoM) SA Dec: -0.20% (est -0.50%; prev 1.00%) Irish Industrial Production (MoM) Dec: -12.40% (prev 4.60%) GOVERNMENT/ CENTRAL BANK NEWS AND COMMENTARY EU Winter Economic Forecast: Outlook Improved But Risks Remain ECB's Praet: ECB Simply Applied Its Rules For End To Greek Waiver ECB's Jazbec: QE Could End Sooner Than Sept. 2016 ECB's Weidmann Says ECB Should Apply 'Strict Standards' On ELA ECB's Weidmann: Countries Must Bear Consequences Of Own Actions Greek Finance Ministry Says ECB Decision Aimed At Eurogroup Greek Govt Official Says ECB Move Will Have Limited Impact BoE In Wait-And-See Mode Amid Inflation Woes EU's Moscovici: QE Is Significant Enough To Have Macroeconomic Impact France Hollande: ECB Greece Decision But Onus On EU Govts Fed's Rosengren Sees No Clear Sign Inflation Trending Higher Japan Taps Reflationist As New BoJ Board Member GOVERNMENT/ CORPORATE BOND NEWS & COMMENTARY US 10yr Treasuries Forming A Base Amid Inverted Head And Shoulders - RBS ECB's Greek Shock Reverberates In Bonds From Germany To Spain Spain Sells EUR3.8 Bln In Bonds Including New 5-Year Linker France AFT Issuance: A Total Amount Of EUR8.999 Bln d'OAT EQUITY NEWS & COMMENTARY Wall Street Eyes Earnings Amid Deepened Greek Turmoil European Stocks Halt Three-Day Advance As ECB Limits Greek Loans ECB's Ban On Greek Bonds Hits Europe, Greece Slumps FTSE Falls As ECB Turns Screw On Greece Asia Stocks Subdued As Greece Jitters Offset China Stimulus Pfizer To Buy Hospira In $17 Billion Cash Deal Sprint Corp. Posts Q3 GAAP Loss Of 60c/Share BT To Buy Mobile Firm EE For GBP12.5 Bln Fitch Affirms BT Group At 'BBB'/Positive On EE Announcement Moody's Affirms BT's Baa2 Following Planned EE Acquisition; Positive Outlook Siemens Said To Plan 7,400 Job Cuts As CEO Reduces Costs Daimler 'On Upward Curve' After 10% Profit Jump Munich Re Q4 Profit Slides; Lifts Dividend BNP Paribas Earnings Hit By US Settlement AstraZeneca To Buy Actavis Lung Drugs As Q4 Earnings Fall Short Vodafone Posts Better Than Expected Third Quarter Sales Sanofi Profit Soars On Lower Lemtrada Charge Tesco Under Formal Investigation Over Payments And Dealings With Suppliers Samsung May Sell Majority Stake in Tokyo Skyscraper CURRENCY/ COMMODITY NEWS & COMMENTARY EUR/USD: Strong Gains On Strong German Manufacturing Report Talk Of SNB Buying EURUSD Spurs The Euro Rally GBP/USD: Cable Holds Gains As BoE Policy Unchanged Dollar Index Drops As Market Sentiment Recovers Gold Extends Gains On Greece Uncertainty, US Data Eyed Copper Slides After Inventory Surge Highlights Surplus Brent Rises Back Above $55, Outlook Still Fragile EMERGING MARKET NEWS & COMMENTARY IMF Said To Seek Limit To Ukraine Bailout Share As War Escalates Ukraine's Central Bank Says Strengthens Monetary Policy To Target Inflation S&P: China Cut To RRR Seen Helping Banks CNB Keeps Interest Rates Unchanged, Confirms Exchange Rate Commitment