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Wednesday, November 5

5th Nov - ECB ahead, my bet

I challenged the Nordea's head strategist:

@JanVonGerich three months, Feb-5 2015, yield diff now 1.53, I pay if 1.8 touched, you pay if 1.26 touched. Ok?

Previously on MoreLiver’s:

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Merkel says euro zone extremely fragileReuters
German Chancellor Angela Merkel said on Tuesday the euro zone was extremely fragile and made clear Europe's biggest economy would not borrow more to invest, resisting pressure from some of its partners to do more to boost growth.

José Manuel Barroso: ‘Not everything I did was right’FT
On his final day, the former European Commission president explains his actions during two terms

EU auditor criticizes waste, urges tighter controlsReuters
Almost €7bn of last year’s EU budget paid out improperlyFT
The EU's auditor called on the bloc's new executive on Wednesday to seek better value for taxpayers' money as its report on the 2013 accounts estimated that up to 9 billion euros ($11.27 billion) may have been misspent.

A Crazy Idea About ItalyBruegel
Jim O’Neill: Italy needs growth in nominal GDP to stop its debt burden from rising any further. To do so it needs Germany's help.

Get out of Spain and Italy and into German coreTradingFloor
The European Commission has downgraded Eurozone growth and says it will do all it can to promote growth and jobs. Spain has reforms in place but is ignoring bureaucracy and its unemployment remains high. Meanwhile, Italy talks tough, and not only ignores the black economy, it and wants to spend more.

Sweden’s Riksbank Ready to Prolong Zero Rates as Next StepBB

Rashomon in euro landThe Economist
Schuman and Monnet’s dream is becoming a nightmare and European policymakers are stuck with contradictory and self-serving explanations for the ongoing tragedy… Will full-blown QE save the euro zone? Maybe, but not for the reason you may think.

Europe Needs to Revitalize Finance for Small and Medium EnterprisesIMF

ECB preview: Moment of truth, but not just yetTradingFloor
ECB will wait for new forecasts and TLTRO’s outcome in December * Internally the ECB is a mess of opposing views * Corporate bond purchases and a minimal QE at some point

Intrigue in Frankfurt Global Macro Trading
This is a clearly orchestrated leak by the anti-QE side, timed to impact the upcoming ECB meeting, possibly to head off the risk that additional stimulus is conducted over the heads of the prior dissenters.

Orphanides also wonders what happened to the ECB’s monetary pillarMarket Monetarist

Euro Area Limping Toward Deflation Fuels QE Calls as ECB MeetsBB
The euro area is edging closer to the moment that deflation risks become reality.

Martin Wolf: Warnings from Japan for the eurozoneFT
Europe has been unwilling to address the structural excess savings of creditor countries

Wolfgang Munchau: Eurozone stagnation is a greater threat than debt FT
Monetary policy can boost markets in the short run, but this cannot be sustained indefinitely

ECB Needs Japanese LessonsView / BB
The required swelling of the ECB balance sheet will not happen without government bond purchases on a much grander scale than in 2010-2012.

The ECB confronts the dark past of its new home with sensitivityFT
The ECB helped create a memorial to Jews beneath its new HQ

Draghi Set To Open at Least One New Chapter in ECB HistoryWSJ

The "ECB Matrix"ZH
Here are the best "disappointment " and "delivery" trades ahead of tomorrow's ECB meeting

ECB:  Everything Can't BeMarc to Market
It may be difficult for Draghi take fresh initiatives now. The second TLTRO is a month away, and the take down is expected to be more than twice the first. The covered bond purchase program is operational (it has even entered the new issue market) and the ABS purchases will soon begin. There are some indications that the pace of contraction in bank lending is continuing to slow. Both the supply of credit and the demand is improving according to the ECB's own surveys. The euro's decline will also be helpful.

Beecroft: Why Draghi's feeling the heatTradingFloor

Should the ECB Follow the BOJ’s ‘Shock and Awe’?WSJ

Quantitative Easing for the PeopleProject Syndicate
It is now a near certainty that, by the end of this year, falling energy and commodity prices will push annual inflation in the eurozone below zero – well under the ECB’s target of near 2%. Rather than continue to depend on misguided conventional thinking, the ECB must pursue the right form of quantitative easing.

Volume of retail trade down by 1.3% in euro area – Eurostat
Euro area retail sales fall more than expected in September – TradingFloor
Weak retail sales due to mild autumn weather – Danske Bank
Periphery Business Cycle Monitor – Danske Bank

Tough road ahead for Obama as GOP win SenateReuters
Republicans rode a wave of voter discontent to seize control of the Senate, dealing a punishing blow to President Barack Obama that will limit his legislative agenda for his last two years in office.

GOP takes control of Congress – but not a game changer in Washington politicsNordea
The clear result of yesterday's mid-term election could be positive for markets in the near term, but in the longer term it is unlikely to be a game changer in Washington politics. Political gridlock is obviously negative for confidence in households and businesses, but this is not a new negative factor. Despite irresponsible Washington politics over the past several years, above-trend growth in the US economy seems solid on track. As a result, Fed lift-off is no longer a matter of if, but when.                

Gideon Rachman: The US elections – entertaining, but irrelevantFT

Fed Critics Say ’10 Letter Warning Inflation Still Right BB
Signatories of a letter sent to then-Federal Reserve Chairman Ben S. Bernanke in 2010 warning of the risks associated with the bank’s policy of quantitative easing are standing by their claims -- even as the biggest U.S. companies are flourishing, inflation is muted and holding Treasuries has been one of the best trades out there.

Fed’s Kocherlakota: Raising Rates in 2015 Would Be a Mistake – WSJ
Fed’s Rosengren Says More Public Disclosure Needed in Repo Market – WSJ

US Services Sector Slumps As Business Outlook Nears 2-Year Lows – ZH
ISM non-manufacturing slips to four-month low of 57.1 in October – TradingFloor
ISM Non-Manufacturing: Slower Growth in October – dshort
ISM Non-Manufacturing Index decreased to 57.1% in October – Calculated Risk
ISM Services Weaker Than Expected – Bespoke

Kuroda Sets No Limits in BOJ Campaign to Spur InflationBB
Bank of Japan chief Haruhiko Kuroda highlighted his determination to stoke inflation in the world’s third-biggest economy, saying there’s no limit to measures he could take to reach its price target.

Japan on the BrinkKrugman / NYT
Fiscal credibility isn't crucial right now, anti-deflation credibility is.

Daily Central BanksWSJ
Hilsenrath’s Take: Good Morning Ms. Yellen, Rand Paul on Line One * Fed’s Bullard Sees No Need for New Stimulus * Ultralow Inflation Hits Europe in Different Ways, Complicating Fix * BOJ Governor Defends “Monetary Bazooka” Approach * Ruble Sinks to Fresh Lows as Russian Central Bank Scales Back Interventions

Daily MacroWSJ
GOP’s midterm win in focus, but global economy bigger concern. BoJ’s Kuroda defended expanded asset-purchase program and made it clear he would do more in the future if inflation data continue to miss the target.

Ville-niminen vihreä ihmiskilpiMatias Turkkila / PS

Sanna Ukkola: Vaalihermot pinnassaSanna Ukkola / YLE
Lähestyvät vaalit saavat tunteet pintaan ja hermot kireälle. Toimittajatkin joutuvat nyt puolueiden tulilinjalle, kirjoittaa Sanna Ukkola.

Synkästä syksystä epätietoisuuden talveenVesa Varhee / TalSa
Vuoden loppu lähestyy, ja epävarmuus Suomen kehityksen suunnasta pahenee. Vakavasti otettavat poliittiset avaukset loistavat, epäilemättä vaalitaktisista syistä, poissaolollaan. Puolueet ovat haluttomia paljastamaan äänestäjilleen tilanteen vakavuutta tai sitä, että tarjolla on vain karvaita lääkkeitä.

  TALOUSNavigaattori: Vaikeat ajat jatkuvat Suomessa kaupan ja palveluiden aloilla
 – Nordea
Maailmantalouden nousu on jatkunut vanhojen teollisuusmaiden johdolla. Yhdysvallat ja Iso-Britannia ovat kelpo vedossa. Niiden talouskasvun vahvuus yllätti myönteisesti kolmannella neljänneksellä, työmarkkinat parantavat koko ajan, ja keskuspankit kyttäävät varpaillaan oikeaa hetkeä rahapolitiikan kiristämiselle. Fed lopetti viime viikolla arvopapereiden ostot ja hankkii uusia enää siinä tahdissa kuin nyt hallussa olevia erääntyy.    

Kasvun prosentit – Näin korjaamme osinko- ja pääomatuloverotuksenEVA
Pääomatuloja pitäisi verottaa lievemmin, esittää EVATE
"Monimutkaiseksi rapautunut" osinko- ja pääomatuloverojärjestelmä pitäisi uudistaa rakenteeltaan yhdenmukaiseksi

Korkman: Nollakorotuslinja jatkukoon yli toistaiseksi sovitunYLE
Sixten Korkmanin mielestä nollakorotusten lisäksi voisi harkita työeläkemaksujen alentamista tilapäisesti. Julkisen sektorin leikkauksista hän ei taantuman aikana innostu.

Suhdannenäkymät talvikaudelle vaatimattomatEK
Odotukset nopeasta käänteestä parempaan ovat hiipuneet

Mitä tehdä, jos talous ei elvy koskaan?KL
OP-Pohjolan pääekonomisti: Sekulaarisessa stagnaatiossa tarvitaan kysyntäelvytystä. Toisaalta, jos potentiaalisen tuotannon kasvu on hidastunut, tarvitsee sopeutua elämään aiempaa matalamman tulotason kanssa.

Miksi Suomen vienti ei vedä ja mitä sille voi tehdä – lyhyt kertausTyhmyri

Varman tj: "Suomi ja Japani kohta samassa veneessä" Demari
Varman Murto Demokraatissa: "Talouspolitiikan varasto on tyhjä"TE

Työn loppu ja keskiluokan eroosio, osa IVTakkirauta