Follow ‘MoreLiver’
on Twitter
EUROPE
The state of the
monetary union
– vox
First,
the difference in labour market performance between the US and the Eurozone is
one of degree but not of kind. Second, the economic consequences of the
sovereign debt crisis will be mostly gone by 2018, but the political crisis
will continue. Third, enforcing fiscal rules via political arm twisting is a
recipe for disaster. Market discipline must instead be brought back, but
without financial fragmentation. Limited and conditional Eurobonds are the best
way to do so.
France's economy
minister calls for euro zone government with fiscal transfers – Reuters
Euro area: credit
recovery is gaining traction – Pictet
Unchanged inflation
reduces pressure on ECB – Danske
Bank
UNITED STATES
As central bankers from around the world gather this week in Jackson Hole
for the Federal Reserve’s annual Economic Policy Symposium, one key topic of
discussion will be the current global stock-market turmoil. But financial
volatility is only one reason why the Fed should not raise interest rates this
year.
The Fed doesn't want to take September off the table. Many officials had
what they believed was a solid case for hiking rates at the next meeting, and
they don't want market turmoil to undermine that case. And that case is not
complicated. It's the Phillip curve combined with an estimate of full
employment (an estimate of full employment that remains sticky despite the
persistent downtrend in inflation). If they move in September, that's the story
they will run with. They don't have another paradigm.
Max McKegg: September
rate hike back on agenda – TF
The US dollar is now back in favour after a turbulent week. Its main
saving grace was the revised GDP number along with Chinese authorities
supporting the stock market and a rally in oil prices. However, little support
is coming from the FOMC where most committee members are still to make up their
mind about how to vote on September 17.
Does 25bp Make A
Difference?
– Tim
Duy
The lack of consensus regarding the timing of the first hike tells me
that we don't fully understand the Fed's reaction function and, importantly,
their confidence in their estimates of the natural rate of unemployment. The
timing of the first hike will thus define that reaction function and thus send
an important signal about the Fed's overall policy intentions.
US Labour Market Monitor – Danske
Bank
Tighter labour market but still waiting for inflation
OTHER
The
extent to which China has managed to put itself into something like the
situation many of its neighbors faced in the late 1990s.
Getting
in the way of outstanding performance
FX: mean reversion – Nordea
The message of the Jackson Hole is that they don't know, but optimism
remains that inflation is on the way back. FX appreciation as a hurdle. Go with
central bank bias or stay in the range.
Alberto Gallo: Central
bank monetary arsenal is increasingly ineffective – FT
Structural
forces limiting growth and inflation are not being addressed
Olivier
Blanchard’s Greatest Hits – iMFdirect
To
mark his departure, we’ve pulled together some of the most read and talked
about of his blogs for iMFdirect over the years.
Blanchard: Looking
Forward, Looking Back
– IMF
IMF
Chief Economist Blanchard to step down end September * Financial crisis raises
potential existential crisis for macroeconomics * Need to address longer term
issues of low productivity growth, increasing inequality
MARKET TURMOIL
JPM: "Nothing Appears To Be Breaking" But "Something
Happened" – ZH
JACKSON HOLE
Fed
update: Wrap up on JH – Danske Bank
JH
reveals spirit of the times – TF
Hawkish
Fed talks tough, but ready to wait – TF
JH
Post-Mortem: "Door Still Fully Open To September Lift Off" – ZH
Fischer
Praises Economy, Straddles FOMC Liftoff Date Camps – BB
Fischer
sees inflation rebound, allowing gradual rate hikes – Reuters
Carney:
BoE stance on rates unchanged by China – Reuters
Jackson
Hole Questions Inflation Mastery Sought by Draghi – BB
Raising
inflation target won't help much now: researchers – Reuters
REGULARS
Morning MoneyBeat Asia – WSJ
A Wild Week for Capital Markets
Morning MoneyBeat Europe – WSJ
Stocks Drop as Turbulent
Month Nears End
Morning MoneyBeat US – WSJ
Traders Look to Last
Jobs Report before Fed Meeting
Danske Daily – Danske
Bank
Euro rates update – Nordea
Eye-Opener – Nordea
Monster week ahead *
Fed’s Fischer suggests Sep still on the table * Chinese equities down again * Collapsing
inflation expectations send euro and US yields lower * EUR/USD took a breather,
awaiting the coming week
Morning Markets – TF
Another week and another
Chinese central bank policy about turn that sees it stop its $200 billion
equity-buying spree has upended last week's tentative recovery and sent Asian
bourses sharply lower. Markets also continue to digest the implications of this
weekend's Jackson Hole central banker jamboree, and wonder whether the Fed was
as hawkish as appearances suggested and if a September US rate hike is still on
the cards.
Daily Comment – Marc
Chandler
Markets Struggle to
Stabilize
Daily Shot – TF
The Fed's September
policy meeting will likely focus on the dollar's strength and inflation
expectations, and not just the recent market selloff and China's woes.
Brussels Playbook – Politico
Agenda-setting — The
Ex-Files — Immigration tour
US Open – ZH
China Dramatically
Intervenes To Boost Stocks Despite Reports It Won't; US Futtures Slump On
J-Hole
Frontrunning – ZH
FX Update – TF
The Jackson Hole
symposium over the weekend saw mildly hawkish developments from the Fed and
Bank of England, but these were glossed over as the currency traders still
harbour concerns on the risk appetite front and look forward to a pivotal ECB
meeting this Thursday.
From the Floor – TF
We still think it
probably won't happen given global markets turmoil, but there is little doubt
that there are some very itchy fingers in the Fed keen to begin the rate
normalisation process next month.
FINNISH
Aamukatsaus – Nordea
Nollainflaatio palaa piinaamaan Draghia: euroalueen
inflaatioluvut julkaistaan tänään * Brent-öljyn hinta nousi perjantaina 50
dollarin päälle * Ruotsin vähittäismyynti kasvoi heinäkuussa kovaa tahtia
Ministeri Stubb kehuu yhä euroa Suomen historian
vakaimmaksi valuutaksi, vaikka tietää, että euro on yhä keskeneräinen ja
epävakaa kokeilu. Senkin hän tietää, että kriisialtis rahaliitto on
peruskorjauksen tarpeessa – mutta ei sitä, minkälaisen rahaliiton Suomi haluaa
tai saa.