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Thursday, September 4

4th Sep - ECB's dovish surprise, Ukrainian solution?

Previously on MoreLiver’s:

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Riksbank Holds Rates in Bet Deflation Threat to FadeBB
Sweden’s central bank kept its main interest rate unchanged and stuck to a plan to tighten policy at the end of next year in a bet that a surprise half-point cut in July was enough to fight back the threat of deflation.

Putin unveils Ukraine ceasefire plan, France halts warship – Reuters
Finland most vulnerable to Russian gas cut-off – euobserver
New sanctions on Russia depend on events in coming hours: Hollande – Reuters
EU sanctions to target Russian oil groups – FT
Ukraine and rebels back peace plan, ceasefire from Friday – Reuters

ECB meeting: we expect a very dovish statementDanske Bank

Don't pin all your hopes on SME asset-backed securitiesCoppola Comment
Central support for hard-pressed SMEs in the periphery would probably help to repair those economies. But the ABS issuance and purchase programme alone will not be enough. In the absence of other measures, reliance on such a programme would simply create moral hazard for lenders, securitisers and regulators.

Dear eurozone, why can’t we all just get along?FT
Is ECB trying to force Merkel to offer fiscal support, by threatening QE?

Without German Support, QE In The Euro Area Remains A Distant DreamForbes
At Jackson Hole, Draghi gave a clear indication that QE would only be done in partnership with fiscal easing. So far, Germany has shown no support whatsoever for Draghi’s proposal that core countries should ease their fiscal stance to improve domestic demand and raise core inflation

Could German Stimulus Stave Off ECB QE?WSJ

A European savings glut or just mis-priced risk?FT
Europe is creating its own saving glut just like Japan. This creates low growth and low inflation as the private sector saves rather than consume.

Deflation in Europe is Just BeginningZH

Draghi Push for ECB Easing Intensifies Focus on ABS PlanBB

Five Questions for Mario Draghi to Answer TodayBB

Will the ECB Take Action?BB TV

Draghi will need to impress today to push the euro even lowerTradingFloor
The spotlight is squarely on Mario Draghi's press conference today as we find out how much dovishness he delivers and how much is already priced into the very weak euro.

Why QE speculation is so 'terribly sad'Saxo TV
The markets are eagerly anticipating news on Thursday from the ECB as to whether it's going to bring in some sort of QE programme. Bill Blain, from Mint Partners, calls the speculation "terribly sad". And BGC Partners' Michael Ingram tells Lea Jakobiak in London that he doubts any such sort of easing would be legal.

ECB and MoreMarc to Market
We think that improving the likelihood of strong participation at the TLTRO is a key goal of today's ECB meeting.  A small repo rate cut could help, as well as tweaking some of the "modalilties" or rules of engagement.  Draghi will also likely reinforce ideas that an ABS purchase program is highly likely, and there are other measures the ECB can take within its mandate.

Draghi plays QE brinkmanship with Merkel: Ambrose Evans-PritchardTradingFloor

ECB Preview: A ‘Jug Full of Jaw-Boning’?WSJ

Can the ECB’s Asset-Backed Securities Plan Work?WSJ

Changes in the Draghi speech at Jackson HoleECB Watchers

ECB preview - Dovish Draghi to double down on easing?Open Europe

Press release Monetary policy decisionsECB

Introductory statement to the press conference (with Q&A)ECB

ECB modifies loan-level reporting requirements for some asset-backed securitiesECB
ECB publishes final list of significant credit institutionsECB

Now we've seen the cut, what will Draghi say at the conference?TradingFloor
ECB cuts main refinancing rate to 0.05% from 0.15% * Possible surprises – will ABS/covered bond purchase plan be revealed? * Consolidation on cards for exchange rates

Draghi DeliversMarc to Market
After much fanfare, the ECB has surprised the market.  It delivered a 10 bp cut in key rates and committed itself to a ABS/covered bond purchase scheme to start next month. 

Draghi actsFT

ECB's Draghi revises down inflation forecast for 2014 to 0.6% - TradingFloor
ECB cuts main financing rate to 0.05% from 0.15% * Draghi cuts inflation forecast for 2014 to 0.6% from 0.7% * Decision to cut rates was "not unanimous"

EURUSD Plunges Below 1.30, Eurobond Yields Turn NegativeZH

Mario Draghi Delivers Fresh ECB Plan WSJ

ECB cuts rates to ward off euro zone deflation threatReuters

ECB Unexpectedly Cuts Interest Rates as Outlook DarkensBB

ECB Readying Broad Asset-Backed Purchases After Rate CutBB

5 Takeaways From the ECB’s September MeetingWSJ

Does the ECB’s New Stimulus Amount to QE?WSJ

ECB eased monetary policy further - supports June easingDanske Bank

Beecroft: Mario Draghi is "out of ammo"Saxo TV

The ECB Launches Quasi-QEWSJ

Reactions To the ECB’s MovesWSJ

Mario Draghi Sends Stern Reply to ParisWSJ

Draghi’s GambitThe Reformed Broker

Draghi’s intervention startles marketsFT
ECB cuts rates and agrees to purchase asset backed securities

Editorial Draghi launches his counter attackFT

Draghi brings out ABS rocket boostersFT

Live blog: ECB cuts ratesWSJ

Live blog: ECB cuts ratesFT

[Reference] ABS: The key to unlocking Europe's credit markets?Bruegel

NFP preview: Why we should expect a cool 250,000 print – TradingFloor
5 Things to Watch in Friday’s Jobs Report – WSJ
Private Payrolls in U.S. Climb Less Than Forecast in August – BB

July Trade Deficit Better Than Expected, But Excluding Oil Remains Near Record High – ZH
Trade Gap in U.S. Unexpectedly Narrows to Six-Month Low – BB
Trade Deficit decreased in July to $40.5 Billion – Calculated Risk

Service Industries in U.S. Expand at Fastest Pace in Nine Years – BB
ISM Non-Manuf.: August Composite at Another Record High – dshort
ISM Services Index Cruises to a Nine Year High – Bespoke

BoJ only marginally more dovish, no signs of imminent easing – Danske Bank
BOJ Shows Subtle Signs of Cautiousness – WSJ
BOJ Kuroda Voices Support for Weaker Yen – WSJ
BOJ Keeps Record Easing as Kuroda Aims to Stoke Recovery – BB

Daily Central BanksWSJ
Hilsenrath’s Take: Friday’s Jobs Report Next Clue on Likely Fed Policy Path * U.S. Regulators Tweak Final Liquidity Rule for Large Banks * Ignoring Doubters, Indian Central Bank Chief Tackles Inflation * Bank of Japan Stands Pat on Policy * Bank of England Leaves Policy Unchanged As it Awaits Wage Rises

Daily MacroWSJ
European markets are in a holding pattern ahead of the European Central Bank, which, after no action from either the Bank of England or the Bank of Japan, at least has the prospect of delivering a lively press conference by President Mario Draghi. Market expectations of a more aggressive policy move from the ECB have surged following Mr. Draghi’s recent Jackson Hole speech, where he hinted about the possible need for quantitative easing. The thinking is that Mr Draghi will probably stick to jawboning for the next couple of meetings at least, with delicate politics leaving him few options to act as soon as this. But he will need to select his words very carefully in the press conference.

FX Board: EUR craters on ECB dynamismTradingFloor
The euro was weaker across the board, with the symbolic 1.3000 level already coming into view in EURUSD. Can the euro maintain such a strong downward momentum? US data to shake USD pairs tomorrow.

Great Graphic: Central Bank Balance SheetsMarc to Market

EMEA WeeklyDanske Bank

Pääkirjoitus: Talouden jättiläiset kulkevat eri tahtiinHS

Pääkirjoitus: Porvarihallitusta puuhataan joHS

Ekonomisti: Määrällinen elvytys voi iskeä näpeilleTE

Ylen salaiset rekrytoinnit ovat yleisradiotoiminnan arvojen vastaisiaKimmo Saarikko / US

Nobelin palkinto suomen eduskunnalle?Matias Härkönen / US

Stubb hirttäytyy Kataisen napanuoraanAri Alsio / US

Putin hämmentää soppaa - Suomella Nato-kokouksessa kovemmat panokset kuin koskaanIS

Nato-gallupit antavat kannatuksesta väärän kuvanJukka Hankamäki

Kokoomuksen meikki tippuuIL
Katainen ehosti ylimielisenä pidetyn kokoomuksen työväenpuolueeksi. Nyt meikki tippuu.

Päätös Natosta on tehtävä nytHannu Visti

Kommentti: Liittyykö Suomi kohta Natoon?IS
Tällaisen sopimuksen Suomi allekirjoittaa tänään

Suomi allekirjoitti isäntämaasopimuksenIL

Pekka Ervasti: Hyvä meininki! #kokoomusYLE
Taru Tujusen lähtö ja Räty-Männistö -diilin mahalasku osoittavat, että kokoomuksen pakka on ihan sekaisin, kirjoittaa Pekka Ervasti blogissaan.

Euroalueen talous jumittaa – rahaliiton ulkopuoliset valtiot kasvun tielläYLE
Pellervon taloustutkimuksen Markus Lahtinen ei syytä rahaliiton maiden vaikeuksista euroa. Sen sijaan hänen mielestään eri maiden sisäiset tekijät selittävät sitä, miksi eri maat kulkevat nyt eri suuntiin.