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Monday, August 29

29th Aug - After J-hole, fiscal policy





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EUROPE
British PM Will Begin Brexit Negotiations Without Parliamentary Vote – ZH

Brexit, Spanish Elections Loosen Fiscal Discipline in the Eurozone – PIIE

IMF’s Performance on Financial-Sector Aspects of the Euro Area Crisis – PIIE

Paul Krugman: Germany’s Drag – NYT
The remarkably large effect of bad macroeconomic ideas.

Coeure Says ECB May Need to Dive Deeper If Governments Don’t Act – BB
Inaction on fiscal policy, reforms may keep natural rate low * Unconventional policy may have to be used more frequently

New tans, same old 'polycrisis' as Europe's summer ends – Reuters


UNITED STATES
Yellen sees stronger case for Fed rate hike – Nordea
Fed Chair Yellen’s Jackson Hole speech reinforced the view that the Fed will raise rates later this year. Although she left the door open for a rate hike at the September FOMC meeting, we stick to the view that a rate hike is more likely at the December meeting. Yellen’s comments also supported our view that a change to the Fed’s 2% inflation target is rather unlikely in the near future.

Paul Krugman: On Fed Complacency – NYT
Dismissing risks like it's 1999.

The Jackson Hole Post-Mortem – ZH

Editorial: Where the Fed Goes From Here – View / BB

Disappointed by what came out of Jackson Hole – Larry Summers


OTHER
BOJ’s Kuroda Says Ready to Ease as Jackson Hole Debates Options – BB

Aurelija Augulyte: FX: volatility on-leashed – Nordea
The market reacted to Yellen's speech by taking the USD stronger. September hike? Status quo for Fed's balance sheet and higher rates - what it means for EURUSD? The JPY strength challenged, as commodity currencies look for support.

Leader: Monetary policy: When 2% is not enough – The Economist
The rich world’s central banks need a new target

Central bankers fear threat of low-growth rut – FT
Without parallel action by lawmakers, economies could still be left vulnerable

The Mundell-Fleming trilemma: Two out of three ain’t bad – The Economist
A fixed exchange rate, monetary autonomy and the free flow of capital are incompatible, according to the last in our series of big economic ideas

Macro Monday: Are the USD and US rates at an inflection point? – TF
We are at the inflection points of tactically higher moves in the USD and US rates that could potentially run for the next one to four months. A key risk is this Friday’s US nonfarm payrolls; an abysmal number similar to the May NFP would unravel this potential inflection point.

Mark Gilbert: One Chart Shows What Investors Are Dreaming About – View / BB

Ian Traynor obituary – The Guardian
Europe editor of the Guardian who covered the Solidarity strikes in Poland, the fall of the Berlin Wall, the rise of Putin and the Greek euro crisis


REGULARS
Danske Daily – Danske Bank

Eye-Opener – Nordea
ISM and US payrolls are this week’s highlights * September Fed hike is “alive” * USD rallies after Fed’s chair and vice chair endorse tightening

Morning Markets – TF
September is back on the table for a rate hike Monday morning and while that still looks unlikely a move before year-end is now looking more than a probability and even two rate hikes by December 31 is now priced in at 17%.

Euro wrap-up – Daiwa

Daily Market Comment – Marc Chandler
Dollar Gains Extended, but Momentum Fades

Daily Market Comment – Macro Man
It may be crazy, but Friday's outcome may just have opened the door for a Fed move in September

Brussels Playbook – Politico
Back to school — Apple in Commission’s eye — Estonia (sort of) votes

US Open – ZH
Global Stocks Slide, Futs Flat; Commodities Down On Stronger Dollar As Hike Odds Reprice Higher

Frontrunning – ZH

FX Update – TF
Friday’s outside day action in US interest rates and USD pairs sent a loud signal that the USD wants to rally in the near term on more hawkish Fed rate hike talk. Key data this week could encourage or discourage the Friday reversal.

From the Floor – TF
As the tumultuous central banker gathering at Jackson Hole over the weekend fades into the rear view mirror investors and traders have set their sights on this week's main event – Friday's August nonfarm payrolls.


FINNISH
Aamukatsaus – Nordea
Kiinan teollisuuden haasteet jatkuvat * Fedin Yellen oli haukkamaisella linjalla Jackson Holessa * Yellenin puhe nosti USA:n korkoja sekä vahvisti dollaria ja koronnosto-odotuksia * Perjantaina saatavat USA:n työllisyysluvut jatkavat vahvalla linjalla

Kerran vielä finanssikriisin opetuksista – Peter Nyberg