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Monday, September 19

19th Sep - After Bratislava, Merkel bending

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Cheerleading for Europe has become an almost impossible jobThe Economist

Press comments on Juncker’s State of the Union speech - vox
While the press largely share his assessment and praise his clear-headedness, it believes the measures he has put forward are insufficient.

AfD deals fresh blow to Angela Merkel in Berlin vote – Politico
Angela Merkel drops the ‘we can do it’ slogan – Politico
3 things you didn’t know about the German economy – Nordea

„Wenn ich könnte, würde ich die Zeit zurückspulen“ – Welt
Europe’s ‘play it safe’ summit – Politico
EU Leaders Set Course for Bloc After Brexit Vote – WSJ
Bratislava EU meeting: Merkel says bloc in 'critical situation' – BBC
Renzi rocks Merkel’s boat – Politico
Brexit Forces the EU to Make a 'Roadmap' to Avert Collapse – BB
Remarks by President Donald Tusk after the Bratislava summit – EU
Bratislava Declaration and Roadmap – EU
Rebellion against the Status Quo in EU* - euinside

Tusk: UK to launch Brexit by January or February – Politico
EU's Tusk Says May Expects to Start Brexit Talks by February – BB
Larry Elliott: How to solve the chronic UK current account deficit – The Guardian
Slovakia says Europe will make Brexit ‘very painful’ for UK – FT
EU officials 'believe Britain will give up on Brexit if negotiations tough' – The Telegraph
Theresa May: Uncontrolled migration hurts refugees, governments – Politico

FOMC preview: Once a year YellenNordea
We continue to expect the Fed to pass on raising interest rates this week. Although the updated dot plot will likely reduce the expected number of rate hikes this year, we believe it will confirm the Fed’s intention to move in December.

El-Erian: Fed Meeting Shouldn't Obscure BOJ's Big MomentView / BB
Central banks have shouldered too much of the burden and are running out of ammunition.

Macro Monday: It's all about the BoJTF
It's all about the Bank of Japan this week even though the Fed generally always takes centre stage. What the BoJ does or does not do could have a further impact on G3 yields.

A critical week for marketsTF
The Bank of Japan and US Federal Open Market Committee are both announcing their latest respective policy decisions this Wednesday as market correlations break down and investors question the sustainability of the status quo.

FX: data mindedNordea
The Fed, the BoJ... big policy signals ahead. Yield curve steepening caused panic - not for long. The EURUSD support close, and the GBP divergence not to last.

BIS Quarterly Review, September 2016BIS
Dissonant markets? Special features on "Covered interest parity lost: understanding the cross-currency basis", "Foreign exchange market intervention in EMEs: what has changed?", "Domestic financial markets and offshore bond financing" and "The ECB's QE and euro cross-border bank lending"

September 2016 BIS Quarterly Review: Markets pass Brexit test - BIS
Markets recovered quickly from the shock of the Brexit vote. Central banks have exerted a calming influence and have eased further in recent months as dissonant markets raised questions about the outlook and the pricing of underlying risks.

The Intellectual Yet IdiotNassim Taleb

Danske DailyDanske Bank

Week ahead: Fed on hold; BoJ to ease? Banks send 10Y yields lower. The dollar jumped on CPI. Waiting for Fed.

Morning MarketsTF
Markets are bubbling under ahead of the key meetings Wednesday and sterling is once again looking over its shoulder at 1.30 after a stern warning from the Bundesbank president and prime minister Theresa May hinting at article 50 being invoked in early 2017.

Euro wrap-upDaiwa

Daily Market CommentMarc Chandler
Dollar Begins Important Week on Softer Note

Daily Market CommentMacro Man

Daily Press SummaryOpen Europe
Tusk expects Theresa May to trigger Article 50 in January or February 2017, as Slovak PM warns UK of “very difficult” EU exit talks * Post-Brexit EU re-launch summit reveals disagreements over migration and growth policies * Germany‘s traditional parties suffer losses in Berlin state election, as AfD enters tenth of 16 regional parliaments * Over 100,000 people march across Germany to protest EU trade deals with Canada and US * Bundesbank President says City will lose ‘passporting’ rights if UK leaves single market * May to call for “first safe country” policy for asylum seekers in speech to UN * New survey suggests UK companies scaled back investment plans after Brexit vote * UK threatens to veto EU defence plans if they duplicate NATO’s role

Brussels PlaybookPolitico
Juncker YouTube drama — Bratisblaba — Vestager does DC

Global Stocks, US Futures Rebound As Oil Rises, Dollar Drops


FX Update TF
The USD rallied hard into Friday’s close as the core US CPI rose to match its highest level since the global financial crisis in August. The most notable decliner was sterling on May’s apparent intention to invoke Article 50 the formal step toward an eventual Brexit early next year.

From the FloorTF
Asian equity markets and US futures finished Monday's sessions modestly higher despite a weaker close on Wall Street Friday and the explosions in New York over the weekend Edmund Liu reports from the Singapore trading floor for Saxo Bank's regular morning call.

Fed pitäytyy vielä koronnostosta keskiviikkona * Japanin keskuspankki laskenee ohjauskorkoa keskiviikkona * Norjan keskuspankki pitää korot ennallaan torstaina