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Friday, October 31

31st Oct - Japan goes QE

Previously on MoreLiver’s:

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European Commission: A fanfare-free departure for Barrosovoxeurop

Europe's Many Banking ProblemsEconmatters
These tests were only the beginning of a complex process to build a banking union in the European Union. Unlike the stress tests, the next steps in this project could create more divisions in Europe because national parliaments will be involved at a time when Euroskepticism is on the rise. More important, the stress tests will not have a particular impact on Europe's main problem: tight credit conditions for households and businesses. Without a substantial improvement in credit conditions, there cannot be a substantial economic recovery, particularly in the eurozone periphery.

The Stress Test Results Are In – And It’s Trebles All Round!Alpha Now
Our own calculations suggest that equity-market pricing values bank assets at more than a trillion less than their book value, an order of magnitude different from the ECB’s estimates.

ECB preview: More to come, but not this timeNordea
We expect no new policy decisions from the ECB meeting next Thursday. Mario Draghi will likely be confident on the measures taken so far and open towards more. In our view, the ECB is much closer to buying corporate than sovereign bonds. A decision to start corporate bond purchases could be taken as early as in December, when the ECB will have to revise projections down again.     

GS, MS Warn European QE, While Fully Priced In, Is Neither Imminent Nor LikelyZH

Fed Launches First Currency War Salvo, Tells ECB Not To Push Too FarZH

Testing the Eurozone’s Safety NetProject Syndicate
On October 14, the European Court of Justice convened to begin assessing the German Constitutional Court’s ruling that the European Central Bank's “outright monetary transactions” scheme is illegal. This is a dangerous time for OMT – the eurozone’s most potent crisis-management tool – to be called into question.

Euro area unemployment rate at 11.5% - Eurostat
Euro area annual inflation up to 0.4% - Eurostat
Euro zone inflation slightly higher in October – Reuters
Euro inflation slightly higher but more pressure on the ECB – Danske Bank
Deflation Hit More Eurozone Products in October – WSJ
Goldman Slashes Q4 GDP Estimate From 3.0% To 2.2% - ZH
October Consumer Sentiment at 86.9, Chicago PMI increases to 66.2 – Calculated Risk

PCE Price Index: Headline and Core Virtually Unchanged, Remain Below Target – dshort
Personal Income +0.2%, Core PCE prices +1.5% y-o-y – Calculated Risk
U.S. Inflation Undershoots Fed’s 2% Target for 29th Consecutive Month – WSJ
US wage and salary growth inching up, still very slowly – FT
Chicago PMI jumps to 66.2 in October vs. 60 expected and 60.5 prior – TradingFloor
Chicago PMI Smashes Expectations, Jumps To 12-Month High – ZH
Consumer Confidence Jumps To 7-Year High – ZH
Michigan Consumer Sentiment at a Seven-Year High – dshort

China’s GDP Growth: Less Than Meets the Eye?WSJ

Falling Bank Deposits Add to China Economy Warning SignBB
Chinese bank deposits dropped following a crackdown on lenders manipulating their numbers and “illicit” means of attracting money, threatening to weigh on credit growth and hinder efforts to reignite the economy.

Japan consumer inflation slows, piling pressure on BOJ to actReuters
Japan's annual core consumer inflation slowed for a second straight month in September, adding to evidence the Bank of Japan will miss its 2 percent price goal even as it dismisses growing doubts about the efficacy of its money-printing programme.

Your Abe put [updated]FT

Markets Explode Higher As Bank Of Japan Increases QE To JPY 80 TrillionZH

The Kuroda Bazooka Round TwoWSJ

Japan's central bank shocks markets with more easing as inflation slowsReuters
The Bank of Japan shocked global financial markets on Friday by expanding its massive stimulus spending in a stark admission that economic growth and inflation have not picked up as much as expected after a sales tax hike in April.

BoJ unexpectedly expands easing programmeFT
Japan central bank attributes move to weak demand and lower oil price

Bank of Japan opts for another dose of shock and aweFT

BoJ's desperate QE move could see USDJPY hit 125/135TradingFloor

BoJ expands QE programme in surprise easing moveDanske Bank
The target for the annual expansion in the monetary base to JPY 80trn from JPY 60-70 trn previously

Kuroda Surprises With Stimulus Boost as Japan StrugglesBB
Bank of Japan Governor Haruhiko Kuroda led a divided board to expand what was already an unprecedentedly large monetary-stimulus program, boosting stocks and sending the yen tumbling.

Kuroda Jolts Markets With Assault on Japan’s Deflation MindsetBB
Today’s decision to expand Japan’s monetary stimulus may be regarded as shock treatment in the central bank’s effort to affect confidence levels.

Japan: BoJ unexpectedly expands QE - new JPY forecastNordea
The Bank of Japan on Friday unexpectedly announced additional stimulus measures, bolstering its asset purchases for the first time in over a year and a half, as its 2% inflation target looks increasingly difficult to reach. As a result, we change our JPY forecast.

5 Questions About Japan’s Unexpected Stimulus MeasuresWSJ

Investors React to Japan’s Surprise Policy MoveWSJ

BoJ's Halloween Surprise?Pension Pulse

GS: "We Highlight The Potential For Harsh Criticism Of Further Cost-Push Inflation"ZH

Boom goes the dynamiteMacro Man

A trillion here, a trillion there..The Economist
If the markets were suffering from withdrawal symptoms after the Fed's halting of QE on Wednesday, they did not have to wait long for their next hit.

Your extended Abe putFT

Japan Policy Makers Act in Unison As Sales-Tax Decision LoomsWSJ

The BoJ Rally in Seven ChartsWSJ

Daily Central BanksWSJ
Schlesinger’s Take: Behind BOJ’s Halloween Treat, A Scary Slip Back Toward Deflation * Bank of Japan Unexpectedly Eases Policy * Fed’s Yellen Says Economics Can Benefit From More Diversity * Fed’s Williams Says Central Banks Should Refocus on Inflation * Russia Raises Interest Rates

Daily MacroWSJ
The Fed might have stopped pumping liquidity into the system, and the ECB is politically constrained by how much it can do, but the Bank of Japan is working to ensure the global taps remain on full. A BOJ decision to boost its annual asset-purchase program caught Asian and European markets off guard.

FX Board: Yen implosion alters the FX landscapeTradingFloor
A massive drop in the yen on the Bank of Japan's new easing sees all JPY pairs gunning higher, with momentum likely to carry higher still if US data next week is positive. Elsewhere, USD is generally at the top of the heap after mixed action earlier.

Three Central BanksCFR

Net Stable Funding Ratio finalised by the Basel CommitteeBIS
Basel III: the net stable funding ratioBIS
 “A key lesson from the crisis has been the need to prevent overreliance on short-term, volatile sources of funding. The NSFR does this by limiting the use of volatile short-term borrowings to fund illiquid assets”. The NSFR will become a minimum standard by 1 January 2018.

Melkein miljardi mittareihin, jotka lentävät roskikseen muutaman vuoden vuoden päästäTE
Suomen päätös kiirehtiä investointeja näyttää jälleen kerran osoittautuvan huonoksi. Nyt on kyse etäluettavista sähkömittareista.

EKP:n stressitesti valaisee mutta myös huolestuttaaPeter Nyberg
EKP pelaa kaksinaamaista peliä – suuri riski koko EuroopalleTE

Korkman kaipaa elvytystä ja piikittelee tiukan kurin vaatijoitaYLE
Eurooppa elvyttää, mutta ei riittävästi, huomauttaa taloustieteen professori Sixten Korkman. Samalla hän piikittelee niitä poliitikkoja, joiden talouskuripuheet vain pidentävät taantumaa.

Korkman tyrmää Ylellä vallitsevan talouslinjan: "Ei siinä ainakaan ole järkeä"TE

Onko parempi olla kouluttamaton kuin akateeminen työtön?Hannu Visti