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Monday, October 19

19th Oct - China as bad as expected

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Daniel Gros: The End Of German HegemonySocial Europe
Without anyone quite noticing, Europe’s internal balance of power has been shifting. Germany’s dominant position, which has seemed absolute since the 2008 financial crisis, is gradually weakening – with far-reaching implications for the European Union.

Wolfgang Münchau: Better no fiscal union than a flawed oneFT
If this is the kind of integration on offer, preferable to say no and stick with the present system

Philippe Legrain: The Disintegration of EuropeProject Syndicate
It is often argued that the EU progresses through crises, because they focus minds on the overwhelming need for further integration. But such breakthroughs require at least four ingredients, all of which are currently missing.

ECB’s Cœuré Calls on Politicians to Hurry Up and Build the Eurozone Superstate and Federal BudgetCraig Willy

Britain and Europe: The reluctant EuropeanThe Economist

ECB's Nowotny says euro zone policy may need to become expansiveReuters 

Euro Corporate Watch – ECB QE Plus will include utilitiesABN AMRO
We expect the announcement of an extended and larger ECB QE programme before the end of the year * Shopping list will be broadened with more utilities which will bring the total utility pool to EUR 140bn * Purchases in the current illiquid credit market will be supportive for credit spreads * However, improved investor sentiment and lower yields will boost supply which will have a widening effect on spreads * We expect senior non-financials to move in a range of asw+90 to 120 in the medium term

ECB Preview: More wait and seeDanske Bank
ECB members not on brink of announcing further easing * Easing reflected in lower cost and better availability of credit * Still pressure from low market-based inflation expectations * Survey-based inflation expectations released after ECB meeting * Unchanged effective euro will be a headwind to inflation * Easing triggers: growth outlook deteriorates further, ECB lowers headline inflation projections or core inflation forecast

How Spain deals with migrants – The Economist
Germany Faces "National Disaster", Hungary Shuts Border With Croatia – ZH
Merkel's Approach to Erdogan Over Refugees Stirs German Skeptics – BB
How will refugees affect European economies? – Bruegel
Flyktinginvandring för vår eller flyktingarnas skull? – Ekonomistas


Treasury: No Way to Avoid Default Without Raising Debt LimitWSJ

Gavyn Davies: The Fed Board is now seriously splitFT

How the Street Is Reacting to Latest Economic NewsWSJ

The Month In Charts September 2015 Alpha Now
Corporate moves and revelations were in the headlines in September, from Germany to China.

FX Forecast Update Danske Bank
BoJ to reclaim driving seat - more easing in October

FX: ECB and the NIRP narrativeNordea
ECB said last autumn -20bp was the technical floor for its deposit rate. There has been no public signs that the ECB is about to reconsider this view - not in speeches, not in minutes. The market has however started to price in a significant likelihood of another rate cut. Does the market know something economists do not? ECB:s communication on the issue has the potential to materially affect EUR crosses.

The Slowdown In Global Trade In 6 ChartsGavekal

The weak USD scenario for equity bullsCam Hui

EZ and USMacro Man

Global Economy In Charts Short Side of Long

GDP as expected, industry continues to disappoint – Danske Bank
GDP Growth Beats Forecasts as Stimulus Supports Spending – BB
Economic Takeaways of GDP, Investment, Output, Retail Data – BB
GDP beats forecast, but weakest since 2009 – Reuters
Another quarter of remarkably precise China GDP growth data – Reuters
China still less terrifying – FT
China’s economy: the four engines of growth – FT
Official data say China barely slowing. Are they believable? – The Economist

Morning MoneyBeat AsiaWSJ
U.S. Stocks Get That Old Familiar Feeling

Morning MoneyBeat EuropeWSJ
Stocks Rise; Eyes on China

Morning MoneyBeat USWSJ
What’s Good About the Bad IPO Market

Danske DailyDanske Bank

Global DailyABN AMRO
We set out three big issues to watch out for in President Draghi’s presser this week…our base base is that the ECB will expand and extend its QE programme in December * China’s third quarter growth better than expected – signs that negative momentum is easing

Euro rates updateNordea

Slowing Chinese growth, rising anti-immigration sentiment, eyes on the ECB * Fed speeches, Swedish refugees and Polish elections this week * Some relief for Portuguese bonds for a change * USD rebound continues

Morning MarketsTF
Chinese equity shed shed their initial gains from early Monday in response to the better-than-expected but still poor Q3 GDP and trade data from the world's second-largest economy. According to the numbers China's mainland economy grew at 6.9% in the quarter – the slowest pace of growth since 2009, but still slightly ahead of analysts’ forecasts.

Daily ShotTF
While rig counts decline and coffee futures dropped as Colombia boosts exports, a massive rally in orange juice futures continues on a lower than expected US harvest.

Daily Press SummaryOpen Europe
Daily Telegraph: Six Cabinet Ministers seeking to back Brexit * CEBR report sees EU reform boosting GDP by 2.8% * Boris: UK should follow German lead and set limits on EU law * Merkel ready to accelerate Turkey's EU membership talks in return for Ankara’s support in the refugee crisis * Greek parliament narrowly approves reforms to pave way for bailout funds * HSBC Germany’s Chairman sees German financial sector benefiting from Brexit * Far-right party wins in Swiss elections * Hollande sees French economy grow more than forecast this year * Renzi defies European Commission over 2016 budget * Austrian Central Bank Governor says its too early to discuss expanding bond buying * Government formation talks enter decisive stage in Portugal

Brussels PlaybookPolitico
Brussels turf war — Merkel in Turkey — Election roundup

Futures Flat As Algos Can't Decide If Chinese "Good" Data Is Bad For Stocks, Or Just Meaningless


FX UpdateTF
EURUSD remains in technical limbo with a long wait until Thursday’s ECB meeting, which may frustrate those looking for new easing signals from the ECB. Meanwhile, Canada is likely set for a change of the political guard after today’s general election.

From the FloorTF
Today's GDP data from China were a mixed bag, outperforming analyst expectations but still representing a downward move overall. The result, predictably, was a broad hesitancy in world markets as investors look to items like today's Canadian election and Thursday's ECB meeting to set the tone.

Kiinassa todellisuus virallisia lukuja ankeampi * EKP:n agendalla euron vahvistumisen pysäyttäminen * Tällä viikolla luvassa euroalueen ja USA:n ostopäällikköindeksit * Euro oli viime viikon päätteeksi vastatuulessa

Jan Hurri: Tuemmeko Saksaa seuraavaksi autounionilla? TalSa
Mitä suurempi lasku Volkswagenin päästöfiaskosta kertyy, sitä varmemmin tappiot päätyvät veronmaksajien piikkiin. Jos autokriisi on Saksan makuun liian kallis ja jos europäättäjät toimivat niin kuin tähänkin asti, voi Suomikin päästä "kantamaan vastuuta". Kenties rahaliiton "viimeistely" vaatii välttämättä vielä autounionin.