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Thursday, October 13

13th Oct - Markets turning?






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EUROPE

Ashoka Mody: Europe after Merkel – Project Syndicate
Even if Angela Merkel remains Germany's chancellor after next year's federal election, she will be unable to exercise the same authority over Europe as she has since 2010. That will profoundly change how the EU works, and the disruption could have a profound effect on the European project's future.

Deutsche Bank Implements Hiring Freeze, Stock Slides – ZH

  EUROPEAN CENTRAL BANK
ECB preview: Wording is everything – Nordea
We expect no policy changes next Thursday….Our forecast for the December meeting is an un-tapered extension of the asset purchases by six months. However, we no longer expect a deposit rate cut.

Will the ECB fix the collateral and repo squeeze and restore liquidity? – Nordea

  MIGRATION CRISIS
Germany and Austria call for extension of border controls – Politico
Borders in Europe Would Cost Up To $3.3 Billion a Year, Study Shows – WSJ
Ending Schengen would cost up to €20 billion: report – Politico

  UNITED KINGDOM
UK’s twin deficits: how closely related, should we be concerned? – Bank Underground
The currency effects of Brexit – Frances Coppola
Did the Bank of England cause Brexit? – Simon Wren-Lewis
High Court Hears UK Constitutional Challenge – Marc Chandler


OTHER
Hysteresis and fiscal policy during the Global Crisis – voxeu
Antonio Fatás, Lawrence Summers: Conventional wisdom on supply and demand suggests that demand shocks are cyclical or transitory, and that only technology shocks are responsible for trend changes. This column argues that cyclical events can have permanent effects on demand, and therefore GDP. It is time for policymakers to start considering the possibility of hysteresis seriously.

Goodbye monetary policy, here comes fiscal policy? – ABN AMRO
Key takeaways from the 2016 Annual Meetings of IMF/World Bank and IIF and related meetings in Washington DC.

China's Cooling Property Market May Risk Economic Growth – BB
High-profile tightening reverses two years of easing cycle * A property downturn increases potential for a hard-landing

China: Disappointing exports imply weaker currency – Nordea
Today’s data may reinforce the PBoC’s intention to weaken the trade-weighted renminbi, which can be achieved by weakening the spot CNY vs the USD.


REGULARS
Danske Daily – Danske Bank

Eye-Opener – Nordea
Strong USD, weak Chinese trade numbers weighing on equities * FOMC minutes: Not hiking in September was “a close call”. US rates ready for lift-off. GBP strengthened amid lawmakers’ involvement.

Morning Markets – TF
A rough Asian session sparked by a slump in Chinese exports and by what looks like Fed positioning for a December rate move should make for a nervous opening for European markets.

Euro wrap-up – Daiwa

Daily Market Comment – Marc Chandler
Dollar Edges Higher, though US Rates Soften

Daily Market Comment – Macro Man
China: a change in FX reaction function

Daily Press Summary – Open Europe
May rules out Article 50 vote but agrees to “proper scrutiny” of Brexit process * Financial Times analysis suggests UK exit bill of 20bn euros * Manuel Valls: ‘The European project is in trouble’ * Austrian Foreign Minister: There will be no Turkish EU membership

Brussels Playbook – Politico
Farage mirrors Trump — Lonely Hollande — Sturgeon slams hard Brexit

US Open – ZH
Global Stocks Tumble To Three Month Lows As China Fears Return

Frontrunning – ZH

From the Floor – TF
A tremendously poor September exports print from China has again placed "global slowdown" fears at sentiment's centre with vols in major FX pairs like USDJPY and GBPUSD soaring as a result.


FINNISH
Aamukatsaus – Nordea
Fedin syyskuun kokouksen pöytäkirjat eivät tuoneet suuria yllätyksiä * Kiinasta heikkoja ulkomaankauppalukuja * Yritysten huoli Ruotsin heikoista talousnäkymistä lisääntynyt * Dollari vahvistunut markkinoiden luottamuksen USA:n taloutta kohtaan ollessa vahva

Lokakuun talouskatsaus – Euro ja Talous / Suomen Pankki
Suomen talouden kehitys jatkuu kaksijakoisena