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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.
If this is the kind of integration on offer, preferable to say no and
stick with the present system
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 Budget – Craig Willy
EUROPEAN CENTRAL BANK
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 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
MIGRANT CRISIS
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
UNITED STATES
Treasury: No Way to
Avoid Default Without Raising Debt Limit – WSJ
How the Street Is
Reacting to Latest Economic News – WSJ
OTHER
Corporate moves and
revelations were in the headlines in September, from Germany to China.
BoJ to reclaim driving seat - more easing in October
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.
CHINA Q3
GDP
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
REGULARS
U.S. Stocks Get That Old Familiar
Feeling
Stocks Rise; Eyes on China
What’s Good About the Bad IPO Market
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
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
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.
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 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 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
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.
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.
FINNISH
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.