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Tuesday, December 2

2nd Dec - Europe seen to fall in deflation

Previously on MoreLiver’s:

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François Hollande’s Tartuffe SyndromeProject Syndicate
In his classic comedy, Molière shows that allowing pride, rather than reason, to dictate one’s actions invariably ends badly. French President François Hollande appears to have an advanced case of Tartuffe’s malady, repeatedly making political pledges that he cannot honor.

Sweden: Sweden Democrats decided not to support the government’s budgetNordea
The Sweden Democrats decided to vote for the opposition’s budget proposal in the Swedish parliament (Riksdag). This means that the government’s budget bill will not pass the Riksdag at the voting planned for Wednesday 3 Dec. (see earlier “what if”)

Germany recruits France and Italy for fresh assault on tax havensFT

What is behind the reduction of private sector debt? Comparing Spain and the UKBruegel

Economic chill set to make Finland the sick man of EuropeFT

Greece's Great Depression, chartedCoppola Comment

EUR inflation: Falling off a cliffNordea
The EUR inflation market is panicking right now, and the 1Y inflation swap is printing below zero for the first time since the immediate Lehman aftermath. With nominal rates anchored, this is implicit tightening as real rates are soaring. This puts immense pressure on the ECB and with Govie-QE unlikely for Thursday, and the recent moves almost too much to ignore, lesser action is very much in play right now.

Why is euro inflation so low?
Eurozone inflation has been persistently declining for almost a year, and constantly undershooting forecasts. Building on existing research, this column explores the conjecture that low inflation in the Eurozone results from an excess demand for safe assets. If true, this conjecture would have definite policy implications. Getting out of such a ‘safety trap’ would necessitate fiscal or non-conventional monetary policies tailored to temporarily take risk away from private balance sheets.

Investors see euro zone deflation in one yearReuters

The ECB must show leadership to fight threat of deflation FT

Dovish ECB waits for the December TLTRODanske Bank

The German euro is overvaluedAngry Bear

The 2015 economic outlook and the implications for monetary policyBIS
Remarks by Mr William C Dudley, President and CEO of the NY FED

Money Supply – Dudley, the Fed & financial marketsFT
Could unexpectedly low levels of Treasury yields, pushed down by monetary policy in Europe and Japan, lead the Fed to raise interest rates earlier and faster than it otherwise would?

Daily Central BanksWSJ
Derby’s Take: Dudley Explains How Markets Will Influence Fed Rate Rises * Bernanke Ordered Probe of Possible Fed Leak * India’s RBI Leaves Rates Unchanged and Continues to Monitor Inflation * Australia Keeps Interest Rates on Hold * OECD Says Global Inflation Continues to Ease

Daily Macro: Good or Bad Deflation? WSJ
Disinflationary forces in the global economy are alive and well. The question is whether they are having a positive influence by putting money into the hands of consumers and businesses or whether falling prices are feeding into a more entrenched, pernicious form of deflation, the kind that has afflicted Japan for two decades.

Danske DailyDanske Bank

Nordea Morning Nordea
Nordea to present Economic Outlook * Lower oil prices good news for global economy

FI Eye-Opener: Unanchored inflation expectationsNordea
Core yields finally jump – yields with more upside left today. Oil prices rebound. Euro-area inflation expectations still falling like a rock. Equities under pressure. ECB covered bond purchases jump. US ISM giving an overly rosy picture. Euro-area outlook still clouded. Euro-area PPI and Fed speeches ahead

The Dollar Comes Back BidMarc to Market

FX Board: Baiting USD bulls ahead of key event risksTradingFloor
The USD was strong across the board today, with new cycle highs in USDJPY above 119.00 and EURUSD toying with local support. The post-RBA squeeze was quickly reversed and is keeping the bears content for now. But key event risks await for the balance of the week.

Stocks Rebound, Oil Resumes Slide, Ruble Tumbles As Yen Flirts With 119

Daily Shot: Disinflation rowTradingFloor

From the floorTradingFloor
US energy stocks are extremely negative * Deepwater drillers particularly hard-hit * Phenomenal precious metals rally rise * Ruble hits new low

Economic Outlook Dec 2014Nordea

OECD warns big companies at centre of global corruptionFT

OPECilla peiliin katsomisen paikka | Ison-Britannian teollisuuden PMI ylitti odotukset | USA:n teollisuuden ISM-indeksi ennakoitua vahvempi

Navigaattori: Tuhon tielläNordea
Pitkä taantumajakso näkyy rajulla tavalla Suomen talouden keskeisissä tunnusluvuissa. Kansantulo (netto), joka huomioi sekä pääoman kulumisen että velkaantumisen ulkomaille, on vuoden 2007 jälkeen supistunut reaalisesti noin kymmenyksen. Samaan aikaan väestö on lisääntynyt. Asukasta kohti laskettu reaalinen kansantulo on pudonnut seitsemässä vuodessa lähes 13 prosenttia. Koko kansantalous syö ensimmäistä kertaa kahteen vuosikymmeneen enemmän kuin tienaa.

Talousnäkymien päivitys: Väsynyt odottamaanNordea
Öljyn hinnan yllättävän suuri lasku tukee maailmantalouden elpymistä. Hinta on laskenut jo kolmanneksen viime kesästä alle 70 dollariin. Halvempi öljy tukee Euroopankin kasvua, mutta samalla lisää deflaatiovaaraa. Koska inflaatio-odotuksetkin ovat olleet laskussa, Euroopan keskuspankki päättää uudesta elvytyspaketista joulukuussa ja vielä toisesta uudesta paketista maaliskuuhun mennessä. (video ja kalvosulkeiset)

EU:n investointipaketti: Vähemmän tukia, enemmän takauksia ja luottojaYLE
Euroopan investointipankin pääjohtajan Werner Hoyerin mielestä Suomi kykenee itse hankkimaan markkinoilta rahaa komission investointiohjelmaan ehdottamiinsa hankkeisiin. Suomen hakemukset luvataan silti tutkia.

Euroopan johto tähtää hikipajaunioniinRiikka Söyring / US

Pääministeri Stubb haki talousneuvoja Ruotsista – ja sai niitäHenri Myllyniemi / US

Presidentti Niinistö, velka ja hyvinvointi – mukavampi jos Niinistö ei ottaisi kantaa talouteenTyhmyri

Onko ruotsalainen oikeassa?Professorin ajatuksia

Öljyn pienenevä merkitys maailmantaloudelleRoger Wessman