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Wednesday, September 3

3rd Sep - Hope on Ukraine, waning ECB

Previously on MoreLiver’s:

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European Commission top jobs: The runners and ridersFT
The Juncker regime will be overtly more political, streamlined and more focused around its top priorities – at least if its organogram organisational chart is to be believed. It will mark one of the biggest overhauls of the EU executive in more than a decade, responding to criticism that it was too bloated, flat-footed and bureaucratic in the face of an existential economic crisis.

The mysterious new Commission organigramFT
We had no obvious reason to doubt its authenticity when we got it… But once we took a closer look at the line-up, we began to scratch our heads.

New government lifts inflationNordea
SEK FI & FX Strategy: Election could change market view on Riksbank Nordea
In the past years, the Riksbank has cut rates by 1.75% on the back of falling inflation, weak resource utilization and a similar development in the euro-zone. This has been a very favorable tailwind for bond investors to lean against. It has also been the major force driving the SEK weaker since 2012. But the winds could be changing in 2015

Scottish Independence Would Have ‘Major Consequences’WSJ
Should Scotland Leave the Pound Zone? – Project Syndicate

Top German banker slams ECB for 'arbitrary' stress testsReuters
A top German banker has accused the European Central Bank of acting arbitrarily and inconsistently with tests designed to check the stability of the eurozone's biggest banks, saying they seemed designed to disadvantage the strongest institutions.

Investors expect banks to raise $67.02 billion after ECB testsReuters
ECB's landmark review of euro-zone banks will have to ask lenders to raise an additional 51 billion euros ($67.02 billion) to be credible with markets, a Goldman Sachs survey of large institutional investors has found.

The SNB is coping just fine with 'unwanted love' Steen!TradingFloor
FX Diversity view presents different take on SNB dilemma * SNB's euro peg not inherently flawed like GBP experiment in early 1990s * SNB 1.2000 floor to the euro not under any obvious threat

Periphery Business Cycle MonitorDanske Bank
The periphery was the strong region in the euro area measured in terms of economic growth in Q2 * A third of the output gap is due to credit weakness * The ECB’s negative deposit rate has initiated a hunt for yield and periphery rates have declined further in particular in the 2-5Y segment.

Leaked Russia sanctions paper: the excerpts – FT
Russia: Time to Buy on the Cheap? Some Investors Think So – WSJ

ECB to Roll Out QE? Not So FastWSJ

Surprise ECB news could overturn consensus on euroTradingFloor
Further downside on EURUSD not a certainty * Market seeking specifics on ECB's asset-backed securities programme * Contrarian investors might look at EURAUD

Deutsche Bank’s Jain Sees ECB Running Out of OptionsBB
“The imperative for structural reform is one the ECB has been harping on quite consistently.”

Handicapping the ECB Meeting Marc to Market
Draghi may get German support for QE if Germany could oversee its implementation… The proverbial circle can be squared if Draghi steps down as ECB President and takes the high profile post of Italy's president.  Germany's Weidmann is the obvious choice as his successor.

Could German Stimulus Stave Off ECB QE? – WSJ
By dropping hints, that the German government might be open to offering stimulus, it seems that Chancellor Angela Merkel and her finance minister, Wolfgang Schaeuble, are looking to give Mr. Draghi reasons not to launch QE.

Draghi's Jackson Hole Speech Has Been Misunderstood Pieria
Draghi's concern is that the unemployment that was originally cyclical is becoming structural…The result would be a permanently elevated unemployment rate and/or reduced labour force participation rate, a higher NAIRU and lower trend path for growth… So the really radical part of Draghi's speech was his call for an investment programme led by the EU itself.

Europe According to DraghiProject Syndicate
A few months ago, the consensus was that the time for redesigning the euro had passed, and that the eurozone would have to live with the architecture inherited from its crisis-driven reforms. Not anymore. It may take time before agreement is reached and decisions are made, but the discussion is bound to resume.

Volume of retail trade down by 0.4% in both euro area and EU28 – Eurostat
Retail sales fall in July, but still suggest higher private consumption – Danske Bank
Cheap energy pulls down euro zone producer prices drop in July – Reuters

Strong factory orders, auto sales brighten U.S. growth picture – Reuters
July Factory Orders Soar By Most On Record – ZH

BoJ Preview: More dovish statement, too soon for more easing – Danske Bank
Japan's Abe: Ending deflation is new cabinet's top priority – Reuters
Japan: Government reshuffle negative for yen, possibly more focus on reforms – Danske Bank
Cabinet Shake-Up Shows Abe Keen to Deliver on Economy – BB
Goldman on Abenomics’ moment of reckoning – FT
Is Abenomics Working? – Project Syndicate

Australia Central Bank Rules Out Rate Cuts – WSJ
Australia Growth Slows as Stevens Reluctant to Cut Rate – BB

China Services PMI Jumps Most On Record To 18-Month Highs – ZH
China Services Gauges Rebound in Signal of Rebalancing – BB

Daily Central Banks WSJ
Schlesinger’s Take: Bank of Japan Eyes Higher Inflation, Even with Lower Growth * Five Things to Watch at the ECB’s Thursday Meeting * Bank of Canada Seen Holding Rate Steady * Brazil Central Bank Expected to Leave Rate Unchanged * Australia Central Bank Rules Out Rate Cuts

Daily MacroWSJ
Data over the past 24 hours have done little to distract from the sharp picture of divergence between the U.S. and the rest of the world, which has been driving the dollar higher. However, more broadly it has at least softened concerns about the overall global economy, as the numbers show growth in pockets around the world. Europe’s services PMIs were on average slightly weaker than expected, with Germany continuing to be a worry – and that contrasted sharply with the booming report on U.S. manufacturing from the Institute of Supply Management Tuesday. But with strong growth in Spain and the U.K., it wasn’t a monolithic picture of pain. And China’s HSBC services index showed a welcome rebound from a dismal readout in July. All up, this won’t detract from the buy-the-dollar argument, but it is nothing to panic about, either.

FX Update: Euro sideways ahead of ECB – GBP selling overdone?TradingFloor
The currency market is holding its breath with a thin US economic calendar today and a day ahead of a key ECB meeting. Also, it’s time to wonder if GBP selling is getting overdone after yesterday’s Scottish independence vote poll.

Economic Outlook – HeadwindsNordea
Once again the global economy is facing headwinds. The nascent global recovery at the beginning of the year has become subject to growing uncertainty due to mounting geopolitical tensions. The Cold War-like duel between the West and Russia over Ukraine is still escalating, and the Middle East has once again put itself into the spotlight with the war-like situation in Gaza and the advance of Isis in Iraq and Syria.

New financial forecasts – FXNordea
New financial forecasts – RatesNordea


Talousnäkymät - Viiman armoillaNordea
Suomi: Miten alas voi vajota? | Euroalueen näkymät ovat laihat | Yhdysvallat piristää maailmantaloutta

Suomen unohdettava reilu kilpailuRisto Pennanen / TalSa
Suomen pitää hylätä sinisilmäinen usko reiluun kansainväliseen kilpailuun ja opittava vetämään reippaasti kotiinpäin. Lisäksi päättäjien on lopetettava kinastelu ja kaivettava talvisodan henki esiin.

Nordea syyttää hallitusta toimintakyvyttömyydestäVerkkouutiset
"Vain ihme voi kääntää talouden plussalle"

Nolla on eurotalouden ja -korkojen uusi normaaliJan Hurri / TalSa
Talouskasvun ja korkojen vaihtelu on omanlaistaan epävakautta, jollaisesta euroalue näyttää pääsevän eroon. Eurotalouden uusi vakaus on tosin toista maata kuin päättäjät haluaisivat: talous halvaantuu kohti absoluuttista vakautta, jossa mikään ei liiku ja nolla on uusi normaali.

Suomi on yhden shokin päässä neljännestä miinusvuodestaTalSa
Suomen talous on Nordean ekonomistien mukaan vain yhden shokin päässä neljännestä supistuvan talouden vuodesta samoin kuin deflaatiostakin vuonna 2015. Kuluvana vuonna talouden voi kääntää plussalle enää vain ihme.

Painajainen KansakoulukujallaMarkku Huusko / US

Elina Lepomäki (kok): Euron valuvikoja ei ole edelleenkään korjattuYLE

Euro, budjettikuri ja SuperKommissaarJuhani Huopainen / US