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Thursday, August 1

1st Aug - Still weak markets #4150

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Brexit Update
Marc Chandler
The October 31 deadline for the UK to leave the EU is less than 100 days away.  The new Prime Minister is beginning to convince others that that UK will, in fact, leave at the end of October.
Euro area: Weak growth not enough to lift inflationNordea
While Euro-area GDP continues to grow, the pace of growth is not enough to lift inflation to the ECB’s target. The ECB increasingly realizes this and prepares to launch new easing measures in September.

Euro Area Macro MonitorDanske Bank
Symmetry in ECB's target, asymmetry in PMIs

Data adds to the case for ECB action in September Pictet
The euro area economy grew by 0.2% q-o-q in Q2, down from 0.4% in Q1. While 0.2% is still a decent pace of growth, concerns about the economy in the second half of the year have increased.

ISM comment: Weaker than expectedNordea
The ISM manufacturing index dropped to 51.2 from 51.7 and was somewhat weaker than expected. The details however gives hope for a stabilization in the near term.

Fed Watch: First cut in a decadeNordea
The Fed delivered a 25bp rate cut, an early end to QT and stands ready to act as appropriate to sustain the expansion. More rate cuts will follow, but the Fed does not see this as the start of a prolonged rate cutting cycle.

FOMC reviewDanske Bank
'Mid-cycle adjustment' without pre-commitment

The Fed’s pre-emptive strikeING
We characterise this 25 bps rate cut as an early pre-emptive move to help ensure the longest US economic expansion on record continues. It will likely ease again, but not by as much as the market is pricing

The Fed just made us even dumberScott Sumner
The Fed cut rates by only 0.25%, which looks like a mistake.

A disappointing press conferenceScott Sumner
Stocks moved sharply lower on the disappointing forward guidance, which suggested “one and done”, and then recovered a bit when Powell clarified his remarks. I

The Fed Nailed It, Even If Markets DisagreeBB
Powell isn’t responding to a global crisis, just a slowdown. One or two reductions is appropriate.

Markets Remind the Fed That It Can't Win BB
Hours after delivering the desired rate cut, the central bank faced new pressure from markets and the president. What they want, the Fed can’t give.

Powell’s swerves muddy the outlook on US ratesFT

Monthly Executive Briefing Danske Bank
Markets disappointed by the lack of action from the ECB and the lack of pre-commitment from the Fed * The global manufacturing cycle had a weak start to Q3 * No-deal Brexit talk stepped up under new PM Boris Johnson * EU Game of Thrones concluded with two women taking over at the ECB and EU Commission

Trade talks: Tariff threat has not subsided ING
No signs of real progress have come out of trade talks between the US and China which means a new round of tariffs is still looming

Trump to hit $300bn in Chinese goods with 10% tariff FT
Stocks and Treasury yields fall after latest escalation in trade war with Beijing

Negative yields are nuts, when’s the crash?FT
Outside the US, the debt market is officially bonkers.

Five Things to Start Your Day AsiaBB

Eco Day AsiaBB
Powell ‘Let Us Down,’ China's Gen Z, Quantified Easing * Wrongfooted by Fed, world’s few hawks now stuck with low rates * China, U.S. plan next round of trade talks for early September

Five Things to Start Your Day EuropeBB

EU Open RundownRANsquawk

FirstFT Daily BriefingFT

Brussels PlaybookPolitico
Operation Sell No Deal — A haircut’s more fun than a lecture — The world according to Rome

Danske DailyDanske Bank

Eco Day EuropeBB
Fed 1990s Throwback, BOE Rates Day, Trade Drama Spreads * Powell pledge for mini-cycle on rate cuts is like Fed of old * U.S., China to meet again soon; Japan-South Korea heating up

Daily Market CommentMarc Chandler
Mid-Course Correction Sends Greenback Higher

Five Things to Start Your Day USBB

US Open RundownRANsquawk

Eco Day USBB
Fed 1990s Throwback, Argentina’s Curse, Factory Pain * Powell suggests Fed embarking on 1990s-style mini easing cycle * Factories from Asia to Europe become of trade-war casualties

Fed toimitti odotetusti 25 korkopisteen leikkauksen ja lopetti QT:n, markkinoille lievä pettymys | Kiinan tehdasteollisuuden alamäki vakaantui heinäkuussa | Tänään on Englannin keskuspankin vuoro kokoustaa