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EUROPE
German
economic policy is the haunting fear that somewhere, someone may be breaking a
budget rule. This Puritanism is hurting Germany's economy, and keeping Europe stuck in an even Greater Depression
too.
Lew
warns of European ‘lost decade’ – FT
The US
Treasury secretary will warn Europe that it risks a “lost decade”, in an unusually
blunt attack on the economic policies of America’s biggest ally.
U.S. Treasury
Secretary Jacob J. Lew called on Europe to do more to avert a lost decade of growth,
saying central bank easing alone isn’t enough.
Demand
shortage, unit labor cost divergence and substantial debt overhang
Political
spectres have haunted Europe for a long time. For Karl Marx, it was communism, for Churchill
fascism, and for the baby boomer generation the Soviet ‘menace’. Now we also
have an economic spectre in the form of deflation. It may scare people like
inflation did in the 1970s, but we should fear it for good reasons.
The case
of the disappearing Fiscal Compact – CEPS
Following
the Commission’s autumn forecast showing that only five euro-area countries
exhibit a fiscal balance better than the 0.5% of GDP deficit allowed by the
Fiscal Compact, Daniel Gros and Cinzia Alcidi attempt to explain in this new
Commentary why there is precious little policy debate over these flagrant
treaty violations. They find that it is not possible to put fiscal policy in a
legal straightjacket and that the tight rules enshrined in the new Treaty and
in national constitutions are discarded as soon as they become politically
inconvenient.
Juncker
Fends Off Tax Critics, Seeks Disclosure of Breaks – BB
European
Commission President Jean-Claude Juncker sought to blunt an early challenge to
his leadership by rebutting allegations that he presided over sweetheart
corporate tax deals during almost 19 years as prime minister of Luxembourg.
Name a
Mediterranean euro member with an upstart political group that’s anti-austerity,
pro-debt renegotiation and ahead in polls. Greece? Yes. And now Spain.
Opinion
polling leaves little doubt Podemos could break into the mainstream of Spanish
politics at next year’s general election – Europp
/ LSE
UNITED KINGDOM
A Bank of
England dovecote? – Reuters
Inflation
Report – BOE
Bank of
England sees inflation below one pct, slower rate rises – Reuters
GBP
kneejerks lower on BoE Inflation Report release – TradingFloor
Why no
loosening, if conditions mean a greater, below-target deviation? – Long
and Variable
Carney
leads analysts to water, but can’t make all of them think – Reuters
EUROPEAN CENTRAL BANK
Survey: access
to finance of enterprises in the euro area Apr-Sep 2014 – ECB
Dear ECB...get
your act together on bond buying – TradingFloor
You could
argue that with the structure of Eurozone sovereign yields already so low that
the game of yield limbo has almost run its course. In which case, it's tempting
to ask what good will sovereign bond buying by the ECB do? However, with the
risk of “lowflation” or even deflation omnipresent, it is surely worth trying. But
getting the ECB to agree on anything is another matter.
MACRO NUMBERS
Industrial production
up by 0.6% in both euro area and EU28 – Eurostat
Euro zone
industry output rises slightly in September – Reuters
U.K. Unemployment Remains at 6% as Wage
Growth Accelerates – BB
UK wages rise more than expected,
unemployment rate stays unchanged – Reuters
ASIA
BOJ's
Miyao: chance high that QE exit debate can begin in second half of FY 2015 – Reuters
BoJ board
member Ryuzo Miyao said on Wednesday there is a high chance that the central
bank can begin debating an exit to its quantitative easing in the second half
of fiscal 2015, the most specific comments to date about when that debate will
start.
BOJ’s
Sato Sees Inflation Expectations Rising – WSJ
OTHER
Daily
Central Banks – WSJ
Hilsenrath’s
Take: Troubling Signs of Deflation in China * Bank of England Signals Later
Than Expected Rate Rise * Plosser: Raise Rates Soon Or Risk Falling Behind The
Curve * ECB’s Balance-Sheet Goal Takes a Hit * BOJ Board Member Calls for Government
Progress on Reforms
The Asia-Pacific
Economic Cooperation summit concluded with a surprising amount of deal-making
on the part of China.
FI
Eye-Opener: Still breaking records – Nordea
German
yields edge lower in quiet trading. Yields with more downside left.
Intra-Euro-area spreads narrow. Japanese equities hit 6-year highs on hopes
sales tax hike will be delayed. BoE inflation report and Draghi’s speech ahead.
New German 2-year benchmark and more.
Consolidative
Tone Persists, Dollar Mixed – Marc
to Market
FINNISH
Suomen pankeista tiedetään liian vähän – TalSa
Johannes Niemeläinen: Suomen Pankki on kuluvan syksyn aikana
käsitellyt tutkimuksissaan yritysrahoituksen tarjontaan vaikuttavia seikkoja.
Vielä vertailukelpoista tietoa Suomen pankkisektorista on kuitenkin vähän.
Kreikan velat jäävät lainoittajille – YLE
Kreikan velkojen jonkinlainen saneeraus siivottiin keväältä
eurovaalien ja komission kokoamisen alta, mutta nyt velkavaltio on jälleen
kokouspöydillä.
Wahlroos
vs. Vartiainen ym. –
Roger Wessman