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Tuesday, October 28

28th Oct - USD weaker ahead of Fed

Previously on MoreLiver’s:

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For the ECB’s stress test, see my updated special.

Optimizing the EurozoneProject Syndicate
The eurozone is facing a bleak economic outlook, with growth remaining stagnant and the threat of deflation looming large. Its prospects will not improve unless and until it becomes the “optimal currency area” that its creators believed it to be.

Misrule of the FewForeign Affairs
How the Oligarchs Ruined Greece

The case for using public investment to boost growth in EZ is overwhelmingEuropp / LSE
The focus on balancing budgets and pursuing structural reforms has clearly failed to revive Eurozone economies and a large public investment initiative offers the most logical solution under the present circumstances.

De Gucht Warns EU That U.S. May Cut Off Free-Trade TalksBB
Europe’s outgoing trade chief said the U.S. may break off talks on a commercial accord in early 2015 unless Europeans show a firmer willingness to include investment-protection provisions in any deal.

Euro area: higher inflation in October despite oil price declineDanske Bank

Are the Eurozone’s fiscal rules dying?Bruegel
The European Commission and European Council have blinked.1 Reprimanding France and Italy for their transgressions of the fiscal rules was too risky. With face-saving measures, France and Italy will now break the eurozone’s prized fiscal rules.2

Brussels clears France and Italy’s budgetsFT
The European Commission on Tuesday decided not to send the French and Italian budgets back to their governments for major revisions, after both agreed to additional fiscal tightening that makes them closer to meeting EU targets.

Here’s why Germany needs to start spendingFT
If domestic demand does not rise and compensate for the slowdown in world demand, the huge excess of German savings over investment will drag the European economy into a deflationary spiral. That is what standard economic analysis suggests, and that is actually what happened in the 1930s and led to the economic and political disasters of which we all know.

Despite substantial gains in recent German regional elections, the Alternative for Germany may struggle to consolidate its federal presenceEuropp / LSE

Denmark: Inflation headed for zeroDanske Bank

Euro Outflows at Record Pace as ECB Promotes ExodusBB
Domestic and foreign investors spurred 187.7 billion euros ($239 billion) of fixed-income outflows from the euro area in the six months through August

Record outflows from Europe-focused ETFsFT
US investors’ retreat from Europe has accelerated this month, with the amounts they have pulled from European-focused equity exchange traded funds already exceeding the previous record set in August.

Repo rate cut to zero per cent – Riksbank
Monetaty Policy Report, October 2014 – Riksbank
Monetary Policy Report, October 2014; Slides – Riksbank
Numerical Excel data – Riksbank

SEK FI & FX Strategy: Welcome to the end of the lineNordea
Riksbank goes to zero, what’s next?Nordea
Riksbank Cuts Key Rate to Zero as Deflation Fight Deepens – BB
Riksbank Rejects Calls for QE After Resorting to Zero Rate – BB
Rates to Zero. What Does Sweden’s Riksbank Do Now? – WSJ
Sweden’s central bank cuts rates to zero – FT

Fed preview: softer tone on inflation but bar for QE4 is highDanske Bank
The Fed’s October Meeting – At A GlanceWSJ 
How Effective Were Fed Bond Buys? A QE Research Bibliography WSJ
The Fed’s experiment in quantitative easing is coming to an endWaPo 

Durable Goods Orders in U.S. Decrease for Second Month – BB
U.S. core capital goods orders post largest fall in eight months – Reuters
U.S. business spending weakens despite upbeat sentiment – Reuters
US durable goods orders miss expectations in September – TradingFloor
Core Capex Drops, Durables Goods Orders Slide, Miss By Most In 2014 – ZH
Durable Goods Report for September: An Unexpected Contraction – dshort

Home Prices in U.S. Show Slower Year-to-Year Increase in August – BB
U.S. home prices rise less than expected in August: S&P/Case-Shiller – Reuters
National House Price Index +5.1% y-o-y in August – Calculated Risk

U.S. consumer confidence jumps in October – Reuters
Consumer Confidence in U.S. Increases to a Seven-Year High – BB
Consumer confidence, Richmond Fed manufacturing jump – TradingFloor
Consumer Confidence reaches highest level for the cycle since 2007 – TradingFloor
Here Is The Reason For The Surge In Consumer Confidence – ZH
The Stunning Difference Between "Income Expectations" And Reality – ZH

Daily MacroWSJ
Fed starting a meeting Tuesday and due to announce its policy decision Wednesday. In general, there is a sense of relief that the most-recent array of economic data and financial information isn’t showing more of severe deterioration in the global economy. But having said that, all investors need to look at the instructive case of Sweden, whose central bank cut rates to zero Tuesday. It is a poster child for the damaging effects of global disinflation.

Daily Central BanksWSJ
Hilsenrath’s Take: Fed Stays on Course * Fed Touchy About Touching Rate Guidance * ECB Stress-Test Results Have Isolated Errors, Inconsistencies * Sweden Cuts Main Interest Rate to Zero to Boost Inflation * Brazil Likely To Hold Rates Steady Amid High Inflation and Weak Growth

Dollar Dithers as QE WithersMarc to Market
Great Graphic: Slowing of World Trade Growth and GlobalizationMarc to Market

Deflaatio – kukaan ei taaskaan nähnyt mitään – Henri Myllyniemi / US 
Economist: Euroalueen deflaatio kurittaa kriisimaita ankarasti – PS
Kateissa: markkinatalous – Hannu Visti 
Yale-professorin terveiset: karsikaa euroaluetta – PS

Osakeasuntojen hinnat laskivat kolmannella vuosineljänneksellä – Tilastokeskus
Nyt asuntohinnat laskevat myös pääkaupunkiseudulla – Verkkouutiset