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Friday, September 9

9th Sep - Suddenly Europe talks about fiscal easing

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The Autumn of Referendaeuinside

The European Welfare State Has a Future Again View / BB
As new and old EU countries disunite, neoliberalism is in retreat

What are the prerequisites for a euro-area fiscal capacity?Bruegel
Three progressive steps for strengthening the fiscal framework at the euro-area level. These lead to less interference in national fiscal policymaking thanks to a more credible no-bailout clause, increased risk sharing and different degrees of provision of euro-area-wide public goods and fiscal stabilisation.

Europe’s Impending Fiscal Volte-FacePIIE
US Treasury Secretary Jack Lew recently declared victory for the US position in the debate over stimulus versus austerity within the G-20. He was even more correct than he may have imagined. Germany, which has led the pro-austerity camp in Europe, is about to shift towards fiscal stimulus.

Public investment stimulus spillovers in the Eurozonevox
The spillover effects of a fiscal stimulus in normal times are likely to be small, at best. This column argues, however, that when interest rates are stuck at the zero lower bound and monetary policy does not offset the expansion, public investment in surplus countries could have significant positive GDP spillovers to the rest of the Eurozone. Given current low borrowing costs, the increase in government debt for surplus countries would be modest, while debt ratios in the rest of the Eurozone could be improved.

German Europe or European Germany?Project Syndicate
With the migration crisis weakening German Chancellor Angela Merkel politically just when her authority in Europe is most needed, the new “German Question” can no longer be avoided.

Goldman Sachs Just Launched Project Fear in ItalyWolf Street
Things could get very ugly, very fast, if those bank bonds collapse.
Don’t worry…the ECB has tasked committees – ABN AMRO
ECB staff projections justify board decision to sit tight – TF
The ECB's asset purchase programme: an early assessment – ECB

This Bubble's Got LegsBB
The whole world is moving together and signs of a massive bubble that spans asset classes are becoming clearer. Yet, given the driver is cash printed by central banks, indications it could pop are scant.

Danske DailyDanske Bank

ECB on hold for now; stocks lower; EUR and oil prices higher
Morning MarketsTF
Pyongyang has once again thumbed its nose at the international community and risked added sanctions; the reclusive regime today carried out its most powerful nuclear test to date. The underground explosion resembled an earthquake and it rattled investors in Seoul driving the benchmark Kospi Composite sharply lower.

Euro wrap-upDaiwa
Daily Market CommentMarc Chandler
Ahead of the Weekend

Daily Market CommentMacro Man
Summarizing Draghi in 5 pictures

Europe DailyWSJ
Ten-Year Bund Yields Turn Positive; Brexit Doesn’t Deter Students

Daily Press SummaryOpen Europe
Chancellor warns that hitting the City of London in Brexit talks will hurt the EU as well as the UK * Fox declares new International Trade department “open for business” * Theresa May considering signing up to revamped Europol regulation * ECB holds policy but hints at further easing to come * Austrian minister says EU’s Brexit strategy shouldn’t be designed solely by Germany, France and Italy * Tsipras hosts mini-summit of Mediterranean leaders * Italy’s biggest union urges members to vote No in referendum on constitutional reform * Hollande drops strongest hint yet that he wants to seek second term next year * Merkel reiterates support for US-EU free trade deal * EU to provide refugees with debit cards in Turkey

Brussels PlaybookPolitico
Refugee debit cards — Anti-austerity front — State of the Union preview

Global Stocks Slide As Bond Curves Steepen On Central Bank Concerns; Oil Falls


FX UpdateTF
The ECB clearly thinks it is pushing as hard as it can push on monetary policy and this has important implications as the complacent assumption that the central bank put will be always and everywhere ready to bail out markets has been the chief market driver since the ugly start to the year.

From the Floor TF
Yesterday's ECB outing saw the insitution decline to expand its current programmes. At this point and with the BoJ and FOMC fast approaching one has to wonder whether this was a choice or a signal that central banks have a hit a wall in terms of policy.

EKP keventää rahapolitiikkaa joulukuussa * USA:ssa työttömyyskorvaushakemusten määrä laski alimmilleen seitsemään viikkoon * Kiinan inflaatio jäi odotuksista * Euroalueen valtionlainakorot nousivat EKP-pettymyksen myötä

Toisin kuin Juha Sipilä väittää, EU:lla ei ole toimivaa strategiaaSuomen Uutiset
VTT Heikki Koskenkylä kirjoittaa Euroopan unionin suunnasta. Ongelmia riittää, ratkaisuja ei.

Jyri Häkämies: EU:n pohdittava uudenlaista talouskumppanuuttaVerkkouutiset

Suomen Pankin uusille johtajille tehtäväPeter Nyberg