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Monday, July 27

27th Jul - Nasty risk-off on China's sell-off


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Enrico Spolaore: Monnet’s chain reaction and the future of Europevoxeu
The idea that Europe’s challenges could be addressed with further integration dates back to the beginning of the European project. This column argues that partial integration might not necessarily lead to more integration. In particular, such a strategy might not be successful in areas involving high heterogeneity costs that do not necessarily reduce with more integration. If further integration is to take place, European institutions may need to accept much more flexibility and have provisions not only for entry, but also for exit.

The IMF’s Euro Crisis Project Syndicate
Over the last few decades, the IMF has learned six important lessons about how to manage government debt crises. In its response to the crisis in Greece, however, each of these lessons has been ignored.

Wolfgang Münchau: The make believe world of eurozone rulesFT
The disagreement between Germany and the ECJ is not about the law, but politics and economics

Money matters: a Capital Markets Union primerPolitico

Poland in no rush to join the euroPolitico

The Italian Job Market Is So Bad That Workers Are Giving Up in Droves BB

This is why Finland has driven such a hard bargain on the bailout of GreeceShaun Richards

Press Release – IMF
Staff Report – IMF
Selected Issues – IMF
IMF urges ECB to use firepower aggressively – FT

Restructuring Greece's debt no longer a question: ECB's Coeure – Reuters
Hans-Werner Sinn: Why Greece Should Give Up the Euro – CESifo

An event-study analysis of ECB balance sheet policies since October 2008EC
Has underlying inflation reached a turning point?ECB
Inflation Data Suggest More ECB SupportWSJ 
Draghi’s ‘Whatever It Takes’ Marks Three Years Proving EnoughBB

Monetary developments in the euro area: June 2015 – ECB
  [M3 +5% (+5), M1 +11.8% (+11.2), NFC loans +0.1% (+0.1)]
Euro area bank lending signals stronger recovery – Danske Bank
July 2015 Ifo Business Climate Index Rises – CESifo
German Ifo defies Greek woes – Carsten Brzeski
German business morale brightens as Greece jitters ease – Reuters

Fed Is Closer to Hitting Its Inflation Target Than People ThinkBB
Signs of wage growth mean the central bank is moving closer to an interest rate hike in September.

Fed May Hint September Liftoff Is on Table With Statement Tweaks BB

Fed staff error reveals “potential” output is mostly nonsenseFT

Durable Goods Bounces, Revised Lower; YoY Declines Warn Recession – ZH
U.S. Capital Equipment Orders Rise for Second Time This Year – BB
US durable goods orders rebound 3.4% in June – TF

Holiday recap: while you were busyNordea

Global Housing Watch July 2015IMF

Daily Central BanksWSJ
Hannon’s Take: What if the Output Gap is Global? * Fed Officials May Offer More Clarity on Rates * Fed Economic Forecasts Released Early * Fed Staffers Slightly Pessimistic About Economy * China Stocks Suffer Sharpest Daily Fall Since 2007

Morning MoneyBeat AsiaWSJ
For U.S. Stocks, a Rough Week

Morning MoneyBeat EuropeWSJ
Stocks Slump In China’s Wake

Morning MoneyBeat USWSJ
Investors Nervous Over Depth of Market Gains

Danske DailyDanske Bank

Euro rates updateNordea

Fed to steal the show: clear signal of September rate hike this week * Lower oil prices could become a concern for the ECB Breakeven inflation lower – warning to ECB, could strengthen the USD

Morning MarketsTF
Asian stocks followed their European and North American counterparts lower on Monday as a fresh bout of worries about Greece and the continued weakness in commodity markets undermined sentiment.

Daily FX CommentMarc Chandler
Plummeting Chinese Stocks Take Toll on Dollar

Daily ShotTF
Some emerging market currency declines against the dollar have been spectacular, with the Brazilian real the major causality. But the falls are not limited to emerging economies, with the likes of the Canadian, Australian and New Zealand dollars all suffering.

Daily Press SummaryOpen Europe
Osborne in Paris as media speculates on June 2016 EU referendum * Leaked reports detail secret plans for return to drachma in Greece * Corbyn: Labour should not give Cameron a free hand during the EU renegotiation * Spiegel: Germany willing to discuss Eurozone budget and ‘euro tax’ * New poll confirms sharp drop in support for Podemos after Greek deal * Polish Central Bank Governor: Don’t expect us to be enthusiastic about joining euro * German state authorities see costs of providing assistance to asylum seekers more than double * Almost half of EU doctors applying for a job in the UK over the past year failed to prove their English skills * Multiculturalism row divides Finnish coalition while Hungarian PM warns against immigration * US raises concerns about number of EU investigations into US digital firms

Brussels PlaybookPolitico
The Greek Plan V — Euro-trap — Brexit tour

Global Stocks, US Equity Futures Slide Following China Crash


FX UpdateTF
We had an ugly close in major equity markets on Friday and that is being followed this morning with ugly risk sentiment in Asia, keeping the USD and commodity currencies under pressure and rewarding the euro and the yen.

From the FloorTF
Chines industrial data fell 0.3% on year sparking yet another run on the Shanghai Composite Index and a run to safe-haven proxies, the euro and the yen as well as corporate bonds.

Jos Fed ei puhu, palkkatilastot puhuvat Fedin puolesta | USA:n BKT-kasvu on piristynyt toisella neljänneksellä | Euroalueen inflaatio jatkaa maanpinnan kyntämistä

Olipa kerran euroSakari Heikkinen

Roger Wessman: Väyrynen, euro ja munakasongelmaMarketnoze

Kuluttajien luottamuksen lasku jatkui heinäkuussaTilastokeskus