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Tuesday, October 21

20th Oct - ECB begins buying covered bonds

Previously on MoreLiver’s:

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Eurozone stagnation is a greater threat than debtFT
Wolfgang Munchau: Monetary policy can boost markets in the shortrun, but this cannot be sustained

The eurozone’s German problemCentre for European Reform

Legal challenges could pose new problems for EU sanctions on RussiaOpen Europe

Eurozone fails to benefit from weak currency as oil price slidesFT
Just as this depreciation is starting to fuel inflation, the ECB must contend with a fall in oil prices that all but wipes out the effect of a sliding currency.

The ECB Changes Its Mind Which Bonds It Will Monetize, Then It Changes It Again – ZH
ECB Said to Start Asset Purchase Plan Buying French Covered Debt – BB
ECB starts buying covered bonds – FT
ECB Unleashes (Covered) Bond Buying Program, Sovereigns Sell Off – ZH
ECB Purchases Begin and Markets Shrug – WSJ

Germany lays down the law to the ECB on monetary policyTradingFloor
The ECB will need to be very cautious in implementing its “new phase” of monetary policy, especially the asset buying plan. Germany, the mainstay of Europe, is not on board.

Credibility meets compromise in Europe's bank stress testReuters
When Europe announced its latest health check of top banks early last year it promised a "comprehensive assessment" of how well prepared they were to withstand another financial crisis.

European Banks See ECB Exams as Step to Unlocking LendingBB
The European Central Bank’s unprecedented inspection of lenders’ books will help end a slump in lending that’s dogged southern Europe for years, said executives at some of the region’s largest banks.

ECB review will clarify Greece's needs: bailout fund head ReglingReuters
A review of the European banking sector due to be released on Oct. 26 should bring clarity on Greece's funding needs, the head of the monetary union's bailout fund said on Monday.

Oil Is Cheap. But Not So Cheap That Americans Won’t Profit From ItBB

Time for the Fed to introduce a forward-looking McCallum ruleThe Market Monetarist
Use the money base as an instrument to hit a 4% NGDP level target

A Q&A With San Francisco Fed’s John Williams – WSJ
Quantitative easing reduced inequality, a top Fed official saysWaPo
Fed to End Bond Buys This Month as Planned, Says Rosengren – WSJ
Low For Long: A Q&A With Boston Fed’s Rosengren – WSJ

How to link Australian iron with Marine le PenMichael Pettis

Market mayhem globally, Credit kleptocracy in ChinaGeorge Magnus

On the USD and US ratesMacro Credit FX

5 Takeaways From the WTO’s World Trade ReportWSJ
Good news:  outlook for global trade this year is a bit better than last year. Bad news: the economic malaise in Europe will drag on the exchange of goods around the world, in turn hurting the potential for global economic growth.

Daily Central BanksWSJ
Da Costa’s Take: Inequality Conference Hints at Limits of Fed Policy * Fed Sticking to its Plan Despite Volatility * Yellen Says Extreme Inequality Could Be Un-American  * China’s Central Bank to Inject More Funds Into Banks * Big Banks Start Charging Clients for Euro Deposits

Daily MacroWSJ
The Japanese market led the way with a 4% surge following a series of down days. But European markets, which had also snapped back on Friday, were back on a downward trend, notwithstanding reports that the ECB had started its asset purchase program – private QE — by buying French covered bonds…worryingly, German sovereign yields edged down again as those of peripheral eurozone economies moved higher, suggesting a possible return to stresses within the single currency region.

FI Eye-Opener: BouncyNordea
Core bond yields rebound. Greek bonds lead a rally in the periphery. European equities with a big rally. Yields with some more room to rise today. BoE Chief Economist sends dovish signals. Euro-area PMIs, US inflation and Chinese GDP. Belgium setting the supply week in motion – big boost from coupon and redemptions.

  WEEKLIES (more here)
Post-Taper Tantrum II: The Week AheadMarc to Market
The narrative is the rekindling of disinflationary forces if the Fed stops providing ongoing monetary support, in the face of global headwinds that undermine growth.

FX: catch breathNordea
The USD (DXY) reversed back to re-test the multiyear downtrend - will it? Lower inflation data could do the trick, but only temporarily. "Tails we win, heads they lose" - commodity FX, now vs EUR.

Weekly Market SummaryThe Fat Pitch
The big question is whether the correction is over and stocks will now rally into year end.

What to Watch in the EU Oct. 20-26WSJ
Stress Tests, Gas Talks and Summits

Strategy: On the radarNordea
Riksbank: how will the new rate path look like? * Swedish macro: a small open economy. Watch out below! * SEK spread-over: perspectives on spreads vis-à-vis the risk sentiment * SEK rates: liability hedging less of a driver in SEK long-end * EUR rates: Schatz spreads and the AQR/stress tests

The Macro Week Ahead: Get Rich Or Die Trying, Risk-OnTradingFloor
Much to focus on this week. In Asia the main macro data will be China’s September FAI, retail sales, IP and most importantly third quarter GDP figures – the world will be tuning in on Tuesday for that figure.

World Week AheadWSJ
Battered Investors Need Assurances in Data

Weekly Central Banks CalendarWSJ

Kreikka horjuu taasKL
Laman piti irrottaa otteensa Kreikasta, mutta euromaita uhkaava kolmoistaantuma ja Venäjän-viennin sukellus saattavat katkaista pahasti velkaantuneen valtion toipumisen.

Britannia haluaa rajoittaa EU:n vapaata liikkuvuuttaTalSa
Britannian pääministeri David Cameron haluaa lopun EU:n vapaalle liikkuvuudelle nykymuodossa. Hän aikoo esittää vaatimuksensa lokakuun lopun EU-huippukokouksessa Brysselissä.

Viikkokatsaus: Q3 BKT-kausi alkaa väkevästi vaikka luottamus yskiiNordea
Tulevaa: Ostopäällikköindeksit painuvat alas * Kiina ja Britit avaavat BKT-kierroksen * Suomen kotimainen kysyntä heikkoa Mennyttä: Yhdysvallat odotettua vahvempi * Inflaatiovauhdeissa isoja eroja

Pääkirjoitus: Työllisyysaste valuu liian alas SuomessaHS

Näkökulma: Eurokriisin selätys jäi haaveeksiPaavo Teittinen / HS

Köyhdymme kaikki ainakin hetkellisesti – mutta kyse onkin köyhtymisen suhteesta ja tavastaTyhmyri

Sisäinen devalvaatio alkoi - Palkat alenevat joTE
Näin paljon maksamme EU:lle – Miksi Suomi ei hae alennusta jäsenmaksuihin?PS

Pelastuisiko Suomi sadan vuoden asuntolainoilla?TalSa
Ruotsissa pitkät, etupäässä korkojen maksamiseen keskittyvät asuntolainat vapauttavat kotitalouksien varoja muuhun käyttöön. Suomalainen haluaa kuitenkin maksaa velkansa ja omistaa kotinsa.

Korhonen paljastaa:
KMS-vaalirahakohu pientä - keskustalle jättituet elinkeinoelämältä vuonna 1987 – IS
Väyrynen ja Kääriäinen jakoivat rahaa itselleen vuoden 1987 vaaleissa – IS
Keskusta maksatti miljoonavelat valtiolla – IL
Näin syntyi yksi Suomen poliittisen historian tunnetuimmista sopimuksista – IS
Media pesi rahaa, lukijoita huijattiin – Verkkouutiset