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Monday, September 7

7th Sep - US labor day starts the week

Due to US-holiday, no charts today (see previous post) and posting earlier than usual. Happy market holidays!

Previously on MoreLiver’s:

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Towards a consensus on the causes of the EZ Crisis vox
There is not yet a consensus on what more needs to be done in order to cope with the Eurozone Crisis. This column introduces a new eBook on the causes and possible solutions to the problem. In it, the authors highlight three ultimate causes for the Crisis. First, policy failures allowed the imbalances to become very large. A second cause is the lack of institutions to absorb shocks at the EZ level. The third one is crisis mismanagement. [index and full pdf]

State of Juncker’s unionPolitico
The EU’s political credibility will take center stage along with one of its leading politicians when Commission President Jean-Claude Juncker delivers the “State of the Union” address Wednesday, an annual event taking on heightened importance this year as Europe grapples with several ongoing crises.

Draghi's QE Dispenses Unwanted Results to European Stock BuyersBB
Asset-Backed Debt Losses Mount as Draghi Support Proves FeebleBB

German industrial output up in July, strongest gain so far in 2015 – Reuters

If You Ever Wondered Whose Side The Federal Reserve Is On...  Tim Duy
It still appears that the Fed's top priority is making sure the cards remain stacked against wage and salary earners.

5-Year Deflation Probability Moves Off Zero Macroblog

Paul Krugman: The Fed Should Remember the 90s NYT

Wake Me Up When September Ends Evan Soltas

September Macro UpdateThe Fat Pitch
The balance of the data continues to be positive. There is little to suggest the imminent onset of a recession.

Joseph Stiglitz: Fed Up with the FedProject Syndicate 
If the Fed focuses excessively on inflation, it worsens inequality, which in turn worsens overall economic performance.

FX: the Fed, the dollar and financial conditions Nordea
The first Fed rate hike has been awaited for quite some time. The pattern of the past three major rate hiking cycles is that the USD weakens by several percent after liftoff, consistent with both QE experiences as well as with Dornbusch’s exchange rate overshooting model. This may not be welcomed by the Fed or by other central banks. How financial conditions develop will be crucial for the Fed and thus for the dollar.

FX: follow reserve managers?Nordea
Do reserve managers drive the USD strength? Peak reserves mean USD will appreciate more? Will USD share in global reserves keep growing?

The Macro Take: Ten days to Fed lift off but the market must hold TF
It's still touch and go with ten days to go before a possible Fed hike, but one thing is for sure - Janet Yellen - and the Fed as a whole - need to see buoyancy in the S&P 500 before any hike occurs and that means values sitting over and above 1800 come September 16.

Peak everything, chartedFT
History tells us that a rate hike cycle takes time to impact the economy and prices.

Known Unknowns and the DollarMarc Chandler
The decline in global equity markets * Clumsy efforts have shaken China’s reputation * Fed is confused

OECD: too early to see yuan devaluation as attempt to boost exportsReuters

Multi-tasking: how to survive in the 21st centuryFT
Modern life now forces us to do a multitude of things at once — but can we? Should we?

G20 supports China’s economic policy – FT
G20 defies gloom to forecast rise in growth – FT
G20 eyes faster economic reforms as cheap credit not enough for growth – Reuters
IMF's Lagarde says Fed should not rush its rate rise decision – Reuters
G-20 Nations Pledge to Avoid Competitive Devaluations – BB
Japan Isolated on China as G-20 Embraces Zhou's Yuan Plan – BB
China's Stock-Market Rout Is Almost Over, Says PBOC Governor – BB
Can the G20 growth plan deliver? – TF

Morning MoneyBeat EuropeWSJ
Stocks Shrug Off China Data

Danske DailyDanske Bank

Euro rates updateNordea

“Risk on/off” to guide Fed hike * Strong jobs report doesn’t ensure September Fed lift-off * Growth signals from China will drive long yields * Inflation surprise likely to help NOK this week

Morning MarketsTF
With US markets closed for the annual Labour Day holiday, Chinese markets are back in business following last week’s two-day break. But though the mood in China was initially cautiously optimistic, allowing indices track higher, markets hit the reverse gear following a downwards revision of economic growth for 2014 to 7.3% from 7.4%.

Daily Press SummaryOpen Europe
EU referendum bill returns to the Commons with Government facing defeat over purdah rules
New poll finds narrow majority of UK voters would vote to leave the EU * Juncker plans to make EU member states pay for opting out of refugee relocation scheme * Germany agrees to spend additional €6bn to deal with asylum seekers

Brussels PlaybookPolitico
Farm protest — Refugees in Germany — Brexit, Dexit and Caxit

FX UpdateTF
It’s a holiday in the US today, but the US dollar is well positioned for further strength this week, and potentially across the board if risk sentiment can pull itself together and avoid a further meltdown.

From the FloorTF
Friday's NFP may have been somewhat inconclusive, but there is evidence that the dollar is coiled to sweep the floor in the coming week or two. For now, however, it's the Emerging Market currencies under the cosh.

Kiina jatkaa globaalina murheenkryyninä, viime vuoden BKT:ta korjattiin alaspäin * Markkinareaktiot USA:n työllisyyslukuihin ristiriitaiset * Hiljainen viikko edessä

Jan Hurri: Rahakokeet jatkuvat, mutta talous ei tottele TalSa
Suomen talous taantuu ja muukin euroalue polkee paikoillaan, vaikka EKP syöttää talouteen tuoretta tuohta minkä kerkiää. Keskuspankki yrittää erityisesti saada kuluttajahintoja nousuun, mutta talous ei tottele. Inflaatio tästä vielä puuttuukin.

Etlan Vihriälä: Kreikka-tuki myönnettiin EVM:stä väärin perusteinHS
"Myöntämisen edellytys on, että tuki on välttämätöntä euroalueen ja sen jäsenvaltioiden rahoitusvakauden turvaamiseksi. Kreikan tukeminen ei täytä ehtoa", sanoo Vihriälä.

Stubb: Tiukka kuri koskee myös SuomeaHS
Valtiovarainministeri Alexander Stubb (kok) muistuttaa, että EU:n tiukka kuri ja tiukat säännöt koskettavat myös Suomea. "EU:n sisällä on helpompaa käyttää talouspoliittista valtaa silloin, kun oma talous on kunnossa. Jos Suomi joutuisi liiallisen alijäämän menettelyyn, se menettäisi roppakaupalla sitä sananvaltaa", Stubb sanoo.