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Saturday, August 3

3rd Aug - Weekender: Best of the Week



The best articles from the ending week. Last week’s ‘best’ here.

This was supposed to be a very important week. It wasn’t – we didn’t get any new policy announcements, and the data was mixed.


In Europe, there has been talk of an upturn after the July’s manufacturing PMI for the euro area showed an above-50 reading. Also confidence numbers were relatively strong. The ECB met on Thursday, but did nothing and said nothing. No minutes, no changes to forward guidance, no pledges, nothing on the FX rates. The current consensus view seems to be of a slow recovery in Q2. This opens up the risk of a negative surprises.

In US, the ISM manufacturing index was very strong, but employment report was mediocre. This could be the goldilocks – good outlook, but no reason to tune the monetary policy tighter. Before the week's events, a large part of the trading desks were looking for a September tapering, but it looks like the expectations have shifted to 50-50 split on Dec-2013 and early 2014. Asia’s slowdown was not discussed as heavily this week. Looks like we’re in for slow holiday markets.

Previously on MoreLiver’s:

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EUROPE
In Europe, the case for… optimism? alphaville / FT

Is Europe Still in an Economic Downswing?PIIE
The IMF has revised its economic forecast downward to −0.6 percent for 2013,1 making it unlikely that the real economy will turn worse in the short run. But the latest euro area economic data project a gradual and surprising recovery in the second half of 2013.

Spain and Italy UpdateMarc to Market
The economic data suggests both countries are slowly recovering.   Nevertheless, there is cause for concern and, whether it is the end of the summer holidays or the German election in late September, Q4 may be more challenging for both countries.

  ECB
Measuring Mario Draghi’s Promises 1 Year OnMoneyBeat / WSJ

LTRO payback, Eonia tightening editionalphaville / FT

ECB Officials Want Central Bank to Publish MinutesWSJ

ECB Preview: Transparency on the agendaDanske Bank (pdf)

You say you want ECB minutes? We got minutesMoney Supply / FT

  MACRO NUMBERS
Euro-Area Economic Confidence Jumps to Highest in 15 Months – BB
Euro-Region Unemployment Unchanged as Economy Improves – BB
Euro-Area July Inflation Holds at 1.6% as Recession Lingers – BB


UNITED STATES
IMF Concludes 2013 Article IV Consultation with the United StatesIMF

"The Taper Is Coming" - What Wall Street ThinksZH
Consensus: September tapering start with ~$20 billion in initial reduction.

Fed Statement TrackerWSJ
Fed Keeps $85 Billion QE Pace, Sees Risk of DisinflationBB

  MACRO NUMBERS
Consumer Confidence Dips – WSJ
Economy in U.S. Expands More Than Forecast on Inventories – BB
Manufacturing in U.S. Accelerates More Than Forecast – BB


ASIA
China HSBC PMI dips to 11-month low in JulyReuters
Again, with the China PMIs divergencealphaville / FT


OTHER
July Global PMI ScorecardThe Reformed Broker

Nominal GDP Targeting and the Zero Lower Bound: Should We Abandon Inflation Targeting?Riksbank (pdf)
Sveriges Riksbank Working Papers by Roberto M. Billi

Inflationistas and the global supply shockalphaville / FT
UBS argues this is mostly down to technological supply shocks. The world, it seems, is increasingly suffering from an abundance crisis rather than the archetypal scarcity problem most inflationistas would have you believe.

Guide to the Markets J.P. Morgan


FINNISH
Ei kurjuutta kummempaaTyhmyri
Vielä olisi ehkä mahdollista pelastaa euro ja Euroalueen talous jos halua olisi

Vaarallinen elvytysharha – yhtä vaarallinen kuin säästämisen harhatyhmyri

Varoitus: väkivaltaisia kansannousuja nähdään pian EuroopassaSK
”Eurooppa on jo meidän silmissämme kriisialue, jonka avustamiseen varaudumme”, sanoo Punaisen Ristin Kansainvälisen Komitean (ICRC) pääjohtaja Yves Daccord.

Huippuekonomisti vaatii: EKP:n laskettava ohjauskorko nollaanHS
Euroalueen velkakriisi kestää vielä ainakin kolme vuotta, ennustaa finanssiyhtiö Citigroupin pääekonomisti Willem Buiter.

Espanjan ehdotus voisi ratkaista eurokriisinPaavo Teittinen / TalSa
Espanjan ulkoministeriö vaatii Euroopan keskuspankin rakenteiden muuttamista. Suomen pankin ekonomistin valaisemien tosiseikkojen nojalla on selvää, että ehdotuksen toteuttaminen voisi ratkaista eurokriisin.