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EUROPE
Eurozone
member countries should implement fiscal and structural reforms in exchange for
short-run relaxation of fiscal constraints – not to increase liabilities, but
to focus on growth-oriented investments to jump-start sustained recovery. If
they do, private investors would take note, accelerating the recovery process.
SCOTLAND
Scotland rejects independence - EUR/GBP
targets 0.78/0.76 – Danske
Bank
Pound Rises
on ‘No’ Results in Scottish Referendum – WSJ
Scotland
Votes ‘No.’ Here’s What the Market Thinks – WSJ
Scottish
Result Raises As Many Questions As It Answers – WSJ
EUROPEAN CENTRAL BANK
You call
that a balance sheet expansion? – FT
BofAML on
the definitely underwhelming, potentially stigmafied TLTRO pickup: “After
extrapolating this to the whole banking system in each of the three countries
and including estimates for Portugal and Ireland, we find that the periphery
could have accounted for as much as €61bn, out of the €82.6bn borrowed
yesterday. This leaves an estimate of €21.7bn for the take-up by core banks,
representing as little as 9% of their available allowance”
T.L.T.R.O.
is Too Low To Resuscitate Optimism – Bruegel
The take up
of liquidity under the ECB's new TLTRO programme was well below expectations…Knowing
that the ECB is going to buy ABS starting soon, and knowing that - at least for
the moment - the ECB is unlikely to buy ABS that it would not accept as
collateral, banks might prefer to wait and sell those ABS to the ECB rather
than just pledge them now.
When
break-even inflation expectations are falling… - FT
The 5y5y
break-even rate has unwound the entire Jackson Hole rally and close to record lows. This
matters for the ECB. Odds of “full” QE are rising.
OTHER
Da Costa’s
Take: Market Frets Over Hawkish Dots Despite Dismissive Yellen * Yellen
Highlights Deepening U.S. Poverty * Fed Takes Enforcement Action Against
Santander’s U.S. Unit * Ron Paul Legacy Lives on as House Passes Fed Audit Bill
* British Pound Rises as Scotland Rejects Independence in Referendum
Daily
Macro – WSJ
Investors
have had their spirits lifted. Scotland’s referendum results, which rejected
the independence push by the “yes” campaign, has driven the pound higher, and
Japan’s Nikkei put in another day of gains, with the yen weakening further
against the dollar. That markets are feeling this good–even as a rising dollar
reflects expectations for higher U.S. interest rates next year–suggests fears
of another “taper tantrum”-like disruption coming from that shift in the
Federal Reserve’s policy are well contained. But there is still some time to go
before the Fed actually goes through with a rate hike, plenty of time for
global investors to get nervous. After all, with news today from both Japan and the eurozone–see German
producer-price data–pointing to the risk of further economic weakness and
deflationary pressures, it’s hardly a healthy economic setting for the Fed to
be raising rates into.
Global:
business cycle monitor – Danske
Bank
FINNISH
Entinen eurooppalainen keskuspankkiiri:
"Yhteisvaluutta on tuomittu tuhoon" – TE