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EUROPE
The euro
zone's struggle to avoid another recession will take center stage in the coming
week in the absence of major U.S. data, as investors mull whether the ECB's new
asset-buying plan is a prelude to even more radical steps.
Lagarde
urged Germany to increase investments to help spur the euro
zone's flagging economic recovery, adding that the bloc as a whole needed to
make more structural reforms.
The
Eurozone and opponents of fiscal discipline should stop striking out at Germany. Perhaps the greatest danger to the
Eurozone is not the periphery, but the core just saying enough is enough.
Facing
Reality in the Eurozone – Project
Syndicate
The
implications of ECB President Mario Draghi’s comments at the annual Jackson
Hole gathering of central bankers contained a more startling implication than
many initially recognized. Escaping from recession and avoiding a eurozone
breakup will require ECB-financed fiscal stimulus.
SCOTLAND VOTES
Daily
Shot: Och aye the yes? – TradingFloor
The
last-minute push in support for Scottish independence from Britain is putting pressure on the GBP. Are
there any lessons to be learned from Quebec's independence impact on the
Canadian dollar in the 1990s?
FX
Update: Pound pummeled on fresh Scottish polls – TradingFloor
A new
prominent poll suggests the Yes-to-independence vote is taking the lead in Scotland, but we shouldn't lose our heads
about the implications just yet. Elsewhere, USDJPY is in focus this week as
prime minster Shinzo Abe's cabinet scramble could signal policy changes.
Hardy:
Trading strategies amid Scottish independence uncertainty – TradingFloor
Sterling has dropped to ten month lows after the latest
polls suggested the gap between Yes and No votes in the Scottish Independent
Referendum has narrowed. The result is now too close to call for many
observers. An independent Scotland raises so many economic questions
at this stage that the uncertainty is likely to continue to affect the markets
until polling day and beyond.
Economist Ronald MacDonald says
SNP's plans to use the pound after a yes vote are fundamentally flawed
Scotland split jitters send sterling to
10-month low – Reuters
Scottish-Law
Bonds: A Thorny Question – WSJ
Scotland’s transition to EU membership smooth
and straightforward? – Europp
/ LSE
Pound
Tumbles on Scots Poll as BOE Bets Pared, FTSE Drops – BB
UKRAINE / RUSSIA
Russia hints at flight ban in response to
new sanctions – Reuters
CRISIS COUNTRIES
European
Union financial officials and institutions support Ireland's request to be allowed to pay back
early the International Monetary Fund's part of its bailout, a senior EU
official said on Monday.
Italian
business pushes Renzi for action – Reuters
The annual
meeting of Italy's business elite on the shores of Lake Como was - again -
dominated by calls for reforms and gloomy discussion of an economic crisis now
well into its sixth year.
Italian
Banks Won’t Face Major Issues in ECB Review, Padoan Says – BB
EUROPEAN CENTRAL BANK
The ECB talks tough but acts timidly – TradingFloor
There’s no
doubt the ECB wants to see a lower EURUSD, but to achieve this, it will
probably have to use “additional unconventional instruments”, which means
full-blown quantitative easing. ECB President Mario Draghi has alluded to this,
and it is still up his sleeve. However Germany is not yet prepared to condone QE.
ECB:
“Whatever it takes” still stands – Nordea
Now that
the dust has settled after the ECB’s second significant easing package within
just three months, we come back with thoughts on how to read the ECB and what
to expect from the ABS and covered bond purchases. A volume of purchases of EUR
700 to 1000bn can hardly be reached in these asset classes.
Markets
expect negative overnight rates in the Eurozone through mid 2016 as reserves
become a "hot potato" – Sober
Look
How It
Works: The ECB QE Program – Bespoke
Whether
this program will be effective is anyone’s guess for now. Much will depend on how much the ECB is
willing to buy. ABS will probably be
more stimulative than covered bonds.
Merkel
ally lashes out at Draghi over ECB plans to buy 'junk' paper – Reuters
An ally of
Chancellor Angela Merkel criticized the European Central Bank and its president
Mario Draghi in a rare public attack, telling Bild newspaper the ECB's new
schemes to bolster lending and buy asset-backed securities would scare Germans.
MACRO NUMBERS
Record
German trade surplus points to strong third quarter – Reuters
Germany’s Trade Surplus and Exports Reach
All-Time Highs – BB
Sentix euro
zone index slides in September despite ECB measures – Reuters
Spain house prices rise for first time in
six years: INE – Reuters
UNITED STATES
Keep
your frenemies list short and your enemies list shorter – Reuters
There are
plenty of genuine perils for the United States to consider without canvassing the
planet for additional ones.
Forward
Guidance Heading for a Change – Tim
Duy’s Fed Watch
The US economy is moving to a point in the
cycle in which monetary policymakers have less certainty about the path of
rates. Perhaps they need to be pulled
forward, perhaps pushed back.
ASIA
Xi is
opening up the economy because, above all else, he wants to ensure the long-term
survival and stability of the Communist Party leadership. He thinks economic
reforms are a good bet despite the risks they will usher in.
MACRO NUMBERS
China's August imports fall unexpectedly
but exports buoyant – Reuters
China Posts Record Surplus as
Exports-Imports Diverge – BB
Japan second-quarter GDP shrinks 7.1
percent, adds to doubt over inflation goal – Reuters
Weak Yen Is
Helping Japan’s Recovery, Abe Adviser Says – BB
OTHER
DAILIES
Daily
Central Banks – WSJ
Blackstone’s
Take: A Mixed ECB Verdict in Germany Amid Divergent Economic Signals * Jobs
Report Leaves Fed in No Hurry To Alter Views on Slack or Rates * August’s Job
Gain Suggests A Tougher Path To Full Employment * Japan GDP Shrinks at Fastest
Pace in More Than Five Years * U.K. Pound Slumps After Scottish Independence
Poll.
Daily
Macro – WSJ
All eyes
are on the impending vote for Scottish independence. The latest poll was a
shock, suggesting for the first time that a “yes” vote–in favor of splitting
off from the union–might be a possibility. With banking and asset management
making up a large portion of the Scottish economy, people are starting to
wonder what this might mean for global financial stability. Elsewhere, data
show the Japanese economy is in an even worse state than we thought.
Pounded – Marc to Market
Sterling has been pounded by the YouGov poll that
showed that those favoring Scottish independence have gained a slim majority for the first
time.
WEEKLIES
The Week
Ahead: Calm before the Storm – Marc
to Market
The
economic news stream in the week ahead is light. This will allow investors to contemplate last
week's ECB announcements and adjust positions ahead of the critical events of
the following week. These include the FOMC meeting, the launch of the TLTROs
and the Scottish referendum.
The
Macro Week Ahead: Equities bulls gathering momentum – TradingFloor
September
18 is likely to be a big day for forex traders - there's a referendum, a
meeting of the Swiss National Bank and the Federal Open Market Committee
meeting. Plenty to be looking out for
FX: G11? – Nordea
GBP to
weaken further, with Scottish indepdence - yet another risk; Draghi's soft
currency guidance keeps EUR under pressure, but now that EUR rates are at lows,
the EURUSD will increasingly depend on the USD side...
The
Macro Week Ahead: FX volatility is back – TradingFloor
FX
volatility is back. September 18 is the next key anchor date with the
culmination of meetings from the SNB, FOMC & the Scottish referendum. Also
George Soros' Invest Now, Investigate Later?
https://www.tradingfloor.com/posts/macro-week-ahead-equities-bulls-gathering-momentum-1547603
Strategy:
On the Radar – Nordea
ECB &
FX: “Whatever it takes” still alive and kicking * USD rates: Who cares about
the business cycle? * ECB & USD/SEK rates: Flattening pressure mounting on
the USD curve? * SEK macro: Let’s hope the heat wave only killed growth in July
* SEK linkers: The 200bps inflation trade * SEK bonds: SGB 1052 vs 1047
steepening pressure into the futures roll
FINNISH
Suomi ylittämässä EU:n alijäämäsäännön – TalSa
Suomi rikkoo EU:n alijäämäsääntöä – HS
Lyhyt opas venäläismedian tulkintaan – Anton
Nikolenko / US
Nobelisti: Skotlannilla sama ongelma kuin Suomella – "pelätkää"
– TalSa
Skotlanti ottaa suuren riskin, mikäli se päättää tavoitella
itsenäisyyttä tulevassa kansanäänestyksessä. Näin arvioi taloustieteen Nobel-palkinnon
saanut amerikkalainen kansantaloustieteilijä Paul Krugman.
"Seuraavan kahden vuoden aikana Suomen taloudelle käy
todella huonosti" – HS
Lepomäen mielestä ansiosidonnaisen työttömyyspäivärahan
kestoa tulisi supistaa. Hänen mukaansa se ehkäisisi pitkäaikaistyöttömyyttä ja
syrjäytymistä.
Pitäisikö eläkeikää laskea vai nostaa? – Akateeminen taloublogi
Ruotsalainen peruskoulu kriisissä - yli 13 prosenttia ei
läpäise – Verkkouutiset
Oi äiti Venäjä, miksi pakotat meidät Natoon? – Professorin
ajatuksia
Pelko vaanii taustalla: Päättävätkö suurvaltiot taas
Virosta selän takana? – MTV
Kun keskustelee virolaisten kanssa Viron ja Suomen Venäjä-suhteesta,
vuosi 1939 nousee jatkuvasti esille. Tuolloin Suomi vastusti jääräpäisesti
Neuvostoliiton vaatimuksia alueluovutuksista ja päätyi sotaan suurvallan kanssa.
Viro yritti olla provosoimatta suurvaltaa, antoi sille luvan perustaa
tukikohtia alueelleen ja tuli miehitetyksi.