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Thursday, October 23

23rd Oct - European budgets, ECB doubted

Previously on MoreLiver’s:

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A New Pan-European Pension Fund?Pension Pulse

EU Summit: Renzi vs Barroso over EU’s budget letterFT
Paris defends budget amid EU irritationFT
Helpfully, the Italian government posted the “strictly confidential” letter it received from the Commission’s economic chief, Jyrki Katainen, on its website today.

Europe’s Fiscal WormholeProject Syndicate
The fulfillment of policy rules in the eurozone appears to be impossible without growth, but growth appears to be impossible without breaking the rules. With all of the rules pointing toward recession, how can Europe boost recovery?

The Draghi Grand Plan 2.0Humble Student
The theatre may be upsetting for some, but Europe is a place where the elite makes deals behind closed doors. Watch for Merkel et al to relent and effect a fiscal stimulus for structural reform bargain, but not before a lot of Sturm und Drang to show the hardliners that they tried but compromised for the sake of European unity.

Mario Draghi's German problemReuters
"It has become personal," a third official from the ECB said. "Whenever Draghi and Weidmann are somewhere at the same event, there are bets about whether their paths are going to cross. Weidmann avoids Draghi like the plague."

The ECB has good news for French householdsFT
New working paper on fragility and resilience of euro area households: French households are the most financially resilient while German ones are surprisingly fragile.

The ECB as lender of last resort?
As part of the move to a banking union, the largest banks in the Eurozone will soon be supervised by the ECB. This column argues that supervision and the lender of last resort function should be seen as a joint product. After the introduction of the euro, the national central banks continued to act as lenders of last resort because bank supervision remained at the national level. Now that supervision is moving to the ECB, so should the lender of last resort function for the larger, cross-border, banks.

Here’s How the European Bank Stress Tests WorkWSJ

Euro PMI still trending lower – Danske Bank
Eurozone Businesses Cutting Prices – WSJ
Government debt increased to 92.7%/GDP in EZ, 87.0% in EU28 – Eurostat

US Manufacturing PMI Tumbles, Biggest Miss In 14 Months – ZH
Chicago Fed: Economic Growth Picked Up in September – dshort

China: surprisingly resilient in light of substantial slowdown in investmentsDanske Bank

Beware the Chinese FX reserve fallFT

Daily MacroWSJ
Purchasing manager indexes out of China and the eurozone pointed to a modest improvement in business activity in both regions in October. The numbers were hardly signs of robust growth but they for now forestall concerns that the global economy is trapped in a rapid, downward spiral. If the U.S. continues to grow, the hope is that it can drag the rest of the world higher from this modest base.  That’s reflected in more stable markets.

Daily Central BanksWSJ
Douglas’ Take: Global Growth Worries Echo Across the Pond * U.S. Agencies Approve Relaxed Mortgage Rules * Eurozone Private Sector Picked Up Slightly in October * Bank of Canada Abandons Neutral Stance on Rate Moves * Don’t Blame Central Banks for Wealth Gap

Sentiment Healing, but Remains SpookedMarc to Market

Ilpo Kokkila lähtee EK:n johdosta: "Tämä aselvelvollisuus on suoritettu"HS
Kokkilan todennäköisin seuraaja on Koneen entinen toimitusjohtaja Matti Alahuhta, joka toimii EK:n hallituksen varapuheenjohtajana.

Elinkeinoelämä pelkää ilmastohintaaHS
Teollisuutta kuristaa kallistuva sähkö, kotitalouksilta lähtee ostovoimaa

Valuuttaliiton talousteoria puutteellistaHenri Karjalainen / US