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Friday, September 19

19th Sep - Scotland voted "no", markets relieved

Previously on MoreLiver’s:
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Europe’s BargainProject Syndicate
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 rejects independence - EUR/GBP targets 0.78/0.76 – Danske Bank
Pound Rises on ‘No’ Results in Scottish Referendum – WSJ
Beecroft: Scotland says No, markets say thanks – TradingFloor
Scotland Votes ‘No.’ Here’s What the Market Thinks – WSJ
Scottish Result Raises As Many Questions As It Answers – WSJ
Kingdom Stays United, Sterling Rally Stalls $1.6525, Yen Slumps – Marc to Market

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 OptimismBruegel
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.

Daily Central BanksWSJ
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 MacroWSJ
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 monitorDanske Bank

Entinen eurooppalainen keskuspankkiiri: "Yhteisvaluutta on tuomittu tuhoon"TE