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Wednesday, July 10

10th Jul - Fed signals rate cut(s) #4133


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EUROPE
  EUROPEAN CENTRAL BANK
A Pragmatic New European Leadership Team Could Supply Tools to Face the Next Downturn
PIIE
Ultimately, the EU and euro area in particular may have to invent an EU Treaty–compatible version of Japan’s economic policies (Abenomics) to escape deflationary stagnation in its next downturn.

The ECB moves to keep euro bond yields downPictet
Since Mario Draghi in June signalled the ECB’s readiness to embark on more easing should the euro area economy fail to regain speed, euro sovereign bonds yields have fallen across the board, with the 10-year Bund yield briefly moving below -0.4% (the same level as the deposit rate) in intraday trading on July 4. We now expect the ECB to announce a second asset-purchasing programme (“QE 2”) later this year and to cut the deposit rate by 10 bps.

Italy and Austria Take the Bond Market to a Very Weird PlaceBB
Ultra-long Italian debt at 2.85% is the flip-side of the same crazy coin that gave us 100-year Austrian at 1.17%. Investors are in a very weird place.


UNITED STATES
  FEDERAL RESERVE
"Outlook Continues To Dim" - Powell Goes Full Dove To Keep His JobZH

Stocks, Bonds, & Gold Spike As Dollar Dives After Powell's Dovish RemarksZH

Powell rubberstamps July rate cutABN AMRO
Fed Chair Powell began his semi-annual testimony to Congress today with a very dovish prepared statement, seemingly aiming to quash the idea that the recent trade war truce and last Friday’s upside payrolls surprise might derail Fed easing

It's Recession, Not No-flation, That Is Scaring The FedZH

Jerome Powell Just Locked in a July Rate CutBB
If he had any inkling to hold steady this month, his testimony needed to shake bond traders from their 100% certainty about easing. Instead, he only added to their resolve.

Fed chair cements case for cut in interest ratesFT
S&P 500 touches new record on expectations of further monetary policy easing

Warming up for a July cutNordea
The minutes of the June FOMC meeting took a clearly dovish turn, with our sentiment score pointing to the most dovish reading since 2009. Furthermore, Powell’s congressional testimony indicated a 25 bp cut, in our view.

Powell testimony suggests softly, softly approachING
Financial markets have taken Jerome Powell’s testimony as a signal that the Federal Reserve is fully on board for rate cuts. However, the statement is more nuanced and hints at a more cautious approach from the Fed than is currently priced


OTHER
Martin Wolf on Bretton Woods at 75: global co-operation under threatFT
Economic governance system established in 1944 is being undermined by protectionism and nationalism

Why Nasa’s next Moon mission can’t be an Apollo retreadFT
Fifty years after Neil Armstrong’s one small step, the agency’s planners have new priorities


REGULARS
Five Things to Start Your Day Asia BB

Eco Day AsiaBB
July Fed Cut, China Eyes Trump 2020, Mattress Stuffing * 200 data points tell Nomura that key economies need rate cuts * Investors may be underestimating risk of early ECB action

Five Things to Start Your Day EuropeBB

EU Open RundownRANsquawk

FirstFT Daily BriefingFT

Brussels BriefingFT
Von der Leyen’s job interview day: The candidate will be put to the test in a meeting with leaders of political groups

Brussels EditionBB
More Bad Signs?

Brussels PlaybookPolitico
VDL goes public — What the Macronistas want — Remaining in Brexitland

Danske DailyDanske Bank
Fed puts its cards on the table

Eco Day EuropeBB
ECB Underestimated, Powell Testimony, Chinese Deflation * Italy’s wondrous bonds cover up budget challenges still ahead * Macron’s plan to get French youth onto the factory floor

Daily Market CommentMarc Chandler
North American Focus: Poloz and Powell

Five Things to Start Your Day USBB

US Open RundownRANsquawk

US OpenZH
Global Markets Extend Drop As Traders Await Powell

Eco Day USBB
Powell Testimony, Canada Rate Decision, Euro-Area Gloom * Trump concern over dollar’s strength spills onto Fed selection * U.S. soft-pedals Hong Kong criticism as China talks resume


FINNISH
AamukatsausNordea
Powell puhuu kongressille, viime kokouksen pöytäkirjat julkaistaan ja markkinat odottavat vihjeitä Fedin loppukuun kokouksesta | USA:n ja Kiinan kauppaneuvottelijat aloittivat keskustelut uudelleen | Punta heikkeni, kun huoli maan taloudesta kasvoi