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Wednesday, August 13

13th Aug - Floaters eye wages, EZ grave

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ECB's Weidmann rebuffs French calls on euro, growth: Le MondeReuters
It is up to each euro zone government to take the right steps internally for growth while monetary policy should not aim at weakening the euro to improve competitiveness, ECB policymaker Jens Weidmann said on Tuesday, rebuffing French calls for more efforts from Germany and the currency area's central bank.

What’s the Matter With Europe?Krugman / NYT
Austerity, demographics, tight monetary policy

U.K. Wages Post First Drop Since 2009 as Jobless Rate FallsBB
Carney Pledges No Rush to Raise Rates as BOE Focuses on WagesBB

BOE's Quarterly Inflation Report Pushes Sterling DownMarc to Market

Bank of England slashes wages forecast, says key for policyReuters
The Bank of England forecast on Wednesday that wages would grow far more slowly than previously expected and linked their rate of increase closely to borrowing costs, suggesting it was in no hurry to raise Britain's record low interest rates.

Ukraine’s Currency Drop May Swell Emergency Bailout NeedsWSJ
Ukraine’s plummeting hryvnia and deteriorating growth outlook could balloon the embattled country’s emergency bailout costs by nearly $10 billion and intensify speculation a debt restructuring is on the horizon.

Sanctions must prompt a rethink on Russian investmentsFT
Mohamed El-Erian: Escalation in tensions will eventually affect market valuation

EU’s East Braced for Sanctions Pain With GDP Set to SlideBB
The European Union’s biggest eastern economies are flagging as escalating sanctions against Russia and retaliation from President Vladimir Putin exacerbate the euro area’s stuttering recovery from a record slump.

Can Europe Survive Without Russian Gas?Visual Capitalist

Ukraine to Block Russian Aid Trucks as It Tightens Noose Around RebelsBB

Portugal: Pent-up demand to boost growthDanske Bank

Crisis stalks Europe again as deflation deepens, Germany stallsThe Telegraph
Data from Germany, Italy and Portugal put pressure on ECB to act

Young Italian Prime Minister Dares (!) to Defy TroikaWolf Street
"I’m not part of that system that has destroyed this country," said Prime Minister Renzi. National leaders were deposed by the Troika for lesser sins.

Spanish Prices Drop at Fastest Pace Since 2009 Credit Crunch – BB
Industrial production down by 0.3% in euro areaEurostat
Euro area industrial production unexpectedly declines in June – TradingFloor
Unexpected drop in euro zone output clouds recovery hopes – Reuters

Eurozone woes deepen as Spain's industry slumps -0.8%The Guardian

This Fed hawk could signal a shift in the oppositionWaPo
One of the Federal Reserve’s most outspoken officials may not be so hawkish after all. Richmond Fed President Jeff Lacker said he believes the central bank will not raise its target for short-term interest rates until next year.

Yellen resolved to avoid raising rates too soon, fearing downturnReuters
Approaching a historic turn in U.S. monetary policy, Janet Yellen has staked her tenure as chair of the Federal Reserve on a simple principle: she'd rather fight inflation than another economic downturn.

Heading Into Jackson Hole Tim Duy’s Fed Watch
Anything other than a dovish message coming from the Jackson Hole conference will be a surprise.  Tight labor markets alone will not justify an aggressive pace of tightening.  An aggressive pace requires that those tight labor markets manifest themselves into higher wage growth and higher inflation.  Yellen seems content to normalize slowly until she sees the white in the eyes of inflation.

Retail Sales Miss For Third Month In A Row, Worst Print Since January – ZH
U.S. retail sales flat in July, autos fall for second straight month – Reuters
Retail Sales Unchanged in Slow Start to U.S. Third Quarter – BB
Retail sales show moderation following post-winter rebound – Danske Bank
Retail Sales: Another Month of Disappointing Data – dshort
Retail Sales unchanged in July – Calculated Risk
US retail sales flat in July, miss expectations of 0.2% - TradingFloor

Japan’s Quantitative ConfusionWSJ
Japan’s dreadful second-quarter GDP raises the specter of additional central-bank action. Yet the Bank of Japan says its already massive monetary stimulus is open-ended. Then why do analysts think the bank needs to clarify its intentions soon? One reason might be a BOJ table that forecasts the size of its balance sheet. It only goes to the end of this year.

Japan’s GDP sacrifice is price well paid – Reuters Breakingviews
Japan GDP growth collapses amid sales tax shock – TradingFloor
Japan’s Economy Shrinks the Most Since 2011 Quake on Tax – BB
5 Takeaways from Japan’s GDP – WSJ
GDP suggests tax hike not cakewalk, more BoJ easing back in focusDanske Bank

China's GDP: Demographics call the shots – TradingFloor
Economists React: China’s Lending, Investment Slow – WSJ
China: weak July data suggests recovery remains fragile – Danske Bank
China Credit Gauge Plunges as Expansion in Money Supply Slows – BB
China Industrial-Output Growth Slows in Sign Recovery at Risk – BB
China's July economic data points to further softness – Reuters

Daily Macro WSJ
Apart from a few sweet spots like the U.K. and the U.S., the global economy is struggling. Japanese growth crumbled in the second quarter, under the weight of a consumption tax increase and sudden sharp rise in inflation. China appears to be slowing. In the euro zone, Italy’s in recession, France is probably there too, while Germany is stuttering. Rising geopolitical tensions are causing businesses to turn cautious. Emerging markets are suffering a hangover after a couple of boom years. Of course, there could be rebounds all round in the second half of the year, especially if the crisis between Russia and Ukraine is resolved quickly. Is that likely though?

Daily Central Banks WSJ
Hilsenrath’s Take: More Signs of Labor Momentum As Fed Officials Head to Mountains * Banks Retreat From Repo Market in Face of New Fed Regulations * Banks Push to Delay Volcker Rule on Investments * Bank of England Signals Rate Hike in Early 2015 if Wage Growth Picks Up * Japan’s Sharp GDP Slump Spurs Stimulus Talk

Fluid US and UK Rate ExpectationsMarc to Market

Three geopolitical risks investors are ignoringSaxo Bank
US mid-term elections * Scottish independence referendum * Anti-corruption drive in China

Three eclectic bullish trade ideasHumble Student

Major asset chartsShort Side of Long

The Shadows of the Bond Market’s Past, Part IIThe Aleph Blog

JPMorgan Joins Goldman in Designing Derivatives for a New GenerationBB
2007 Deja Vu: Banks and Short Sellers Dump Risk on Chumpsnaked capitalism

"Suomen markkinassa on jotain todella poikkeuksellista"TalSa
Stockmannin toimitusjohtajan Hannu Penttilän mukaan yhtiön ongelmat kumpuavat lähinnä kotimaasta, ei ulkomailta. Kaupan luottamus talouteen on ennätysalhaalla. Penttilä ei usko suhdanteen kääntyvän vielä kohti parempaa.

Putin on pinteessäVesa Varhee / TalSa
Kolumni Venäjän presidentti Vladimir Putin on ajautumassa kenties ylipääsemättömään ahdinkoon. Ukrainan tapahtumista kehittynyt kauppasota EU:n ja Yhdysvaltojen kanssa vaurioittaa Venäjän taloutta ja kansalaisten elämää monin tavoin, ja tyytymättömyys saattaa yllättää presidentin. Maaliskuun vallankumous vuonna 1917 osoitti, mitä tapahtuu, kun Venäjän kansalta loppuu leipä.