24th Jun - Quiet #4120

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EUROPE

Euro Summit: The endless road to kick the can down – ING

This week’s summit of European leaders’ summit was anything but productive. There was little progress on the game of ‘musical chairs’ to fill the top jobs and there seemed to be little appetite to talk about further eurozone integration

Robert Skidelsky: From Versailles to the Euro – Project Syndicate

The agreement that ended World War I, signed in June 1919, imposed a ruinous debt burden on Germany. A century later, Germany has assumed the role of the eurozone’s self-righteous creditor, fretting about “moral hazard” and ignoring the destabilizing, contagious effects of making debtor countries poorer.

Euro-area PMI comment: Modest relief – Nordea

Euro-area PMIs rose slightly in June from low levels, driven by a substantial improvement in France and some improvement in German manufacturing. ECB still needs clear improvement in H2 to regain confidence that inflation will converge to its target.

Eurozone business conditions show slight improvement – FT

Malaise in Germany’s industry spreading to services – ABN AMRO

Italy’s Salvini Vows to Widen Flat Tax Plan for Small Companies – BB

  EUROPEAN CENTRAL BANK

Draghi Wins EU Standing Ovation as He Urges Looser Purse Strings – BB

Draghi Makes His Voice Heard as Inflation Expectations Rebound – BB

Market gauge of outlook jumped most in seven years this week * ECB president probably still has to follow through with action

The coming ECB stimulus package – ABN AMRO

Expect 20bp of policy rate cuts as well as QE

Euro area monetary policy – “Sintrapped” – Pictet

In Sintra, Mario Draghi signalled the ECB’s unequivocal readiness for further stimulus “in the absence of improvement”.

Weidmann softens stance on Draghi’s stimulus policies – FT

Bundesbank president’s shift on open market transactions could enhance ECB job chance

                 

Macron mocks Weidmann in blow to German ECB hopes – FT

Perennial hawk needs French acquiescence to win top job in European central banking

Weidmann’s New Hurdle in Bid for ECB Presidency Is French Irony – BB

ECB Mulling Stimulus Gets Hint That Economy’s Worst Has Passed – BB

PMI picks up in June, though sentiment remains very weak * Mario Draghi says officials ready to act if no improvement

ECB Watch: Draghi’s last shot – Nordea

With only three ECB meetings to go it would be tempting to label Draghi a lame duck. He is far from that, and we now expect him to engineer another easing package at the September meeting. Rates still have some downside potential left.

UNITED STATES

  FEDERAL RESERVE

Fed Loses Its Patience and Almost Everything You Can Trade Goes Nuts – BB

Oil, gold, stocks, bonds post best combined rally since 2011 * After similar situations in the past, stocks have outperformed

FOMC review – Danske Bank

Fed as dovish as it could be without cutting rates already

Fed update – Driving under the (political) influence – Pictet

The role of politics including President Trump’s pressure to cut rates (and his call to dismiss Powell) and the anxiety ahead of the G20 summit on 28-29 June – particularly the crucial Trump-Xi meeting – has been even more impactful than we expected (we were wrong!), leading Chairman Powell to more firmly signal an imminent rate cut. This political noise adds to the underlying dovish picture that has prevailed since January 2019.

Yes, of course Trump could fire the Fed Chairman – Reformed Broker

OTHER

Inflation is the biggest threat in a world of sub-zero bonds – FT

Clamour for greater fiscal spending will challenge policies that have distorted markets

Harr's View - The central bank game changer - winners and losers – Danske Bank

Emily Blanchard: Trade wars in the global value chain era – voxeu

The nature of global commerce has changed dramatically over the past 40 years, with the meteoric rise of global value chain trade. This column, taken from a recent Vox eBook, builds on insights from recent research to identify three critical dimensions of global value chain trade that promise to make today’s trade wars more economically costly and more politically complex than previous trade wars.

China Would Fight Trade War ‘to the End,’ State Media Says – BB

China's US Treasury holdings are not a viable trade war weapon – FT

There are few alternatives to the world's largest debt market.

REGULARS

Five Things to Start Your Day Asia – BB

Eco Day Asia – BB

Trump Denies Fed Threat, China Stimulus, QE Down Under * Trump-Xi take center stage at G-20 as central banks step aside * Guardians of money bristle at Zuckerberg’s new financial order

Five Things to Start Your Day Europe – BB

EU Open Rundown – RANsquawk

FirstFT Daily Briefing – FT

Brussels Briefing – FT

Brussels Edition – BB

Brussels Playbook – Politico

Danske Daily – Danske Bank

Daily Market Comment – Marc Chandler

Slow Start to Important Week

Five Things to Start Your Day US – BB

US Open Rundown – RANsquawk

FINNISH

Aamukatsaus – Nordea

Julkaisimme uuden EKP-ennusteen: uusi kevennyspaketti syyskuussa | Tällä viikolla saadaan useita luottamuslukuja ja loppuviikosta on vuorossa G20-kokous | Dollari heikentyi juhannuksena, eurotaala kolmen kuukauden huipuissa