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Monday, January 4

4th Jan - Bad start for the year

 Stock markets plunge led by China, US industry in recession, Sweden and Denmark impose border controls, Iran and Saudi Arabia. Even Greece is back in "business".

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Wolfgang Münchau: Europe’s multiplicity of crises is not accidentalFT
The EU has an innate tendency towards foul compromises and fair-weather constructions

Economists doubt more ECB QE in 2016FT
FT poll shows nearly half think central bank will do nothing

Europe's Banking Union Begins Taking ShapeMarc Chandler

The Europe Question in 2016Project Syndicate

Spain Deadlock Deepens as Political Turmoil Rocks CataloniaBB

Sweden Seen Closer to Krona Intervention to Tame Exchange Rate – BB
Sweden: Riksbank ready for FX-action Nordea 

Bleak Outlook for Europe’s Migration Crisis in 2016 – PIIE
Denmark Imposes Controls at German Border as Schengen Frays – BB
Merkel Warns Germans Against Refugee Hate in New Year's Speech – BB
Crisis-Prone EU Faces 2015 Redux as Migration Imperils Unity – BB

Paul Krugman: Academics And PoliticsNYT
Academics didn’t become left-leaning, instead the right became extreme.

The Fed's Next MovesView / BB

A Look Ahead Into 2016 Tim Duy

Strategy 2016 Finland: Three strikes and you’re outNordea
Without additional shocks, the Finnish economy would probably finally see a modest recovery in 2016. Unfortunately, further shocks are in the pipeline, as the government and the trade unions clash.

Manufacturing contracts at fastest pace in six years, but no recession – Nordea
U.S. manufacturing activity slumps, construction spending falls – Reuters

How to Be the Ultimate Contrarian Investor in 2016BB

Juhani Huopainen: Big themes: Why 2016 will surely trump 2015TF
EURUSD to break out of its 2015 range, to either 1.25 or 0.95 * Integration fatigue is taking its toll and the project is stalling * Europe's migration crisis likely to become a matter for individual countries * Russia remains quiet in Europe - but for how long?

Dollar:  State of Play Marc Chandler

Jan von Gerich: Strategy 2016: The illusion of higher yields Nordea
With a clear discrepancy between what the Fed is signalling about future rate hikes and what the market is pricing, bonds certainly look vulnerable for a sell-off. In fact, the first months of the year are likely to be characterized by somewhat higher yields. Later in the year, bonds could easily recover again, as has been seen so many times before. The consensus expectation has been for higher yields in all of the past eight years. The bond markets may defy those expectations once again.

Saudi Clash With Iran, Worst Since 1980s, Risks Deeper ConflictBB

Top Risk for 2016: US-Europe Relations, Eurasia's Bremmer Says BB
Relations are seen at their weakest since World War II * Risks include closed Europe, China footprint, Islamic State
China stocks rout on first market day of 2016 trips national trading haltReuters

Morning MoneyBeat AsiaWSJ
Concerns Remain as Calendar Flips

Morning MoneyBeat Europe – WSJ

Morning MoneyBeat USWSJ
Dogs of the Dow Outperformed in 2015

Danske DailyDanske Bank

Euro rates updateNordea

New year off to a busy start * Asian share slides * Further SEK gains warranted

Morning MarketsTF
Equities have tumbled badly in Tokyo and Shanghai on the first day of trading for the new year with China's faltering manufacturing PMI hurting investor sentiment. Jitters over tensions between Saudi Arabia and Iran added to investor anxiety. Crude has been the winner so far from the heightened Middle East tension but the longer-term impact of the intra-Opec rift on commodities is unknown.

Daily FX Comment Marc Chandler
Dramatic Start to the New Year

Daily Press SummaryOpen Europe
Merkel’s sister-party backs red-card veto for national parliaments * Polish foreign minister suggests Poland could compromise on EU rules on migrants’ benefits access in exchange for greater NATO presence in Central and Eastern Europe * Rift between Polish government and European Commission grows following passage of new media law * Majority of CFOs back UK staying in EU although support falls from last year * Six newly-elected Conservative MPs come out for Brexit * Sweden introduces ID controls at Danish border for first time since 1950s * Catalonia heads towards fresh elections after failure to secure governing coalition * Tsipras warns creditors he will not accept unreasonable demands on pension reform * Head of Russia’s largest bank hits out at ECB regulatory approach

Brussels PlaybookPolitico
Poles apart — Catalonia frustration — Saudi-Iran spat

Happy New Year: Global Stocks Crash After China Is Halted Limit Down In Worst Start To Year In History

Frontrunning ZH

FX UpdateTF
The world is waking up to an ugly start to the New Year as geopolitics and a disappointing Chinese data weigh and risky assets take a tumble boosting the yen and punishing the higher yielding currencies.

From the FloorTF
The new year may have arrived in the usual hail of toasts and consumer explosives but an escalating Middle Eastern conflict and an attack of nerves in Shanghai mean that the party was over long before markets ventured forth into 2016.

Rahapolitiikan suunta haussa * Kruunun vahvistuminen piinaa Riksbankia * Kiinan tehdasteollisuus yskii yhä * USA:n teollisuuden luottamus pysyy matalana

Taloudesta tulee toinen toistaan myrkyllisempiä tunnuslukuja, mutta käynnissä on loputon šakinpeluuHS

Suomi irti devalvaatiokierteestäänPeter Nyberg

Islannin ihmeRoger Wessman

Paikallisen sopimisen sudenkuopat Roger Wessman

Devalvaation tarveJuhani Huopainen / US

EU:ta pelastetaan suomalaisvoimin - "työni on ollut pelkkää kriisiviestintää"Verkkouutiset
EU:n komission viestinnästä vastaava Timo Pesonen on melkoisen tehtävän edessä.

Vesa Varhee: Kolmen ässän kova kevätTalSa
Eduskunnan joululoma antaa kolmen ässän hallitukselle tarpeellisen hengähdystauon. Sen tämä vuosi on sujunut sähläyksen, selittelyn ja saamattomuuden merkeissä, kun etenkin talouden uudistuksia koskeneet linjaukset ovat karahdelleet kiviin.

Jan Hurri: Näin seuraava eurokriisi on vielä äkäisempiTalsa
Pankkiunioni on astetta valmiimpi, kun kriisinratkaisuneuvosto ja –rahasto aloittavat vuoden alussa toimintansa. Sekin on yhtä vaihetta varmempi, että seuraava kriisi on entistä äkäisempi. Pian tätä varmistaa myös eurovaltioiden automaattisten velkasaneerausten mekanismi, jos Saksan tahto toteutuu.