Google Analytics

Saturday, October 26

26th Oct - Weekly Links

I'm on Twitter.

Does France have the fiscal space to counter the economic slowdown?
The French 2020 budget is off limits once again, but it is unlikely to be a problem at a time when the economy needs a push. However, Mario Draghi insisted this week that countries like France, with high debt levels, should keep some powder dry

Germany's Factory Recession Sends Industry Employment PlungingBB
Export decline eased, but inflation pressures remain weak * Euro unwinds earlier gains as German numbers disappoint

The end of the German-American affairPolitico
Once firm friends and allies, the two old partners are drifting apart — and that’s not just down to Trump.

Editorial: Germany’s ‘Debt Brake’ Is an Unnecessary DragBB
Fiscal discipline is good, but leaders in Berlin need more freedom to spur a slowing economy.

Introductory statement to the press conference (with Q&A)ECB
ECB Press Conference - 24 October 2019Youtube

Draghi signals slowdown is spreadingABN AMRO
Setting the scene for downward revisions and further stimulus

Draghi's ECB Era Ends With Deja Vu of Trichet ‘Quantum Leap’BB
ECB chief singles out common budget tool as key euro need * Such a measure shouldn’t create moral hazard, Draghi says

ECB: Arrivederci, MarioING
With masterly matter-of-factness. Mario Draghi leaves the ECB with his well-known style... and a Prussian helmet

Thank you, DraghiDanske Bank
The ECB meeting today will mostly be remembered for Draghi's last press conference and not its monetary policy messages. With QE and tiering not effective yet, there was little news to gauge. Draghi refrained from giving specificities on tiering, but indicated that ISIN limits were self-imposed.

Draghi’s last meeting - no regretsNordea
The ECB kept rates on hold as expected at Draghi’s last meeting. The meeting was short on forward guidance, but the ECB still see the need for highly accommodative policy amid weak growth, muted underlying inflation and low inflation expectations.

Arrivederci e grazie, President DraghiNordea
We use our machine learning tools to characterise Draghi relative to other Executive Board members. President Lagarde will need to follow Draghi in handling sensitive politics and get the Executive Board to adopt her policy views over time.

ECB Gives Draghi Warm Farewell After Weeks of Policy QuarrelsBB

Frederik Ducrozet: Mario Draghi’s Greatest HitsTwitter

Results of the Q4 2019 ECB Survey of Professional ForecastersECB
ECB Survey Shows Across-the-Board Cut in Inflation, GDP OutlookBB

The euro area bank lending survey Q3 2019ECB
Credit standards eased slightly for loans to enterprises and loans to households for house purchase, also supported by more favourable funding conditions. This was in spite of a continued tightening contribution of risk perceptions related to the economic outlook. Credit standards, instead, continued to tighten for consumer credit.

Germany's Peace Offering to the ECBBB
Isabel Schnabel's ability to see both sides of the monetary argument would make her a first-rate addition to the central bank's executive board.

ECB’s Wunsch Suggests Escape Clause If Stimulus Causes DamageBB
Belgian governor sees alternative ways to deal with QE limits * Wusch says favors fixing inflation target at 2%, policy review

Federal Reserve preview: More, more more… - ING
Analysts are split on whether the Fed will cut rates for the third consecutive FOMC meeting, but we are of the view the Fed will ease again. A decelerating economy and falling inflation expectations will likely result in further rate cuts over coming months

Divided Fed is likely to cut again without pre-commitmentDanske Bank
Still no pre-commitment to more easing. We expect the Federal Reserve will cut rates again by 25bp when it meets next week (

Fed Preview: Matching the mid-90sNordea
The Fed will most likely cut rates for a third consecutive time next week. A lot of attention will be given to Powell’s wording of possible future rate cuts and whether recent liquidity announcements are in fact QE or not.

Fed Seen Cutting Rates Next Week and Then Hitting Pause ButtonBB
Economists in survey see one more rate decrease next year * Risk of more serious downturn still hangs over U.S. outlook

Trump Isn’t Putin’s Puppet. He’s Just Unfit for Office.BB
Democrats go too far when they say all roads lead to Russia with the president.

Editorial: The World Economy Is Stumbling Toward DisasterBB
If a new recession strikes, the Trump administration will get — and deserve — much of the blame.

Why US GDP is routinely understatedING
Gross Domestic Product is understated by 0.75% every year while inflation is overstated by 0.4%. This is the conclusion of our major new report, in collaboration with John Calverley of Calverley Economic Advisors, which argues that a mis-measurement of the digital sector is distorting our view of the world.

Charting the Global Economy: Draghi’s Exit, Cautious CorporatesBB

Authers' Newsletter: Following the Money Leads to a Grim OutlookBB
Companies in the U.S., Europe and Japan have used cash in radically different ways, but there’s a troubling underlying theme.

Which Is Scarier, Climate Change or CLOs? BB
All due respect to Greta Thunberg, but the corporate-debt time bomb looks like the more imminent threat.

What is priced in for the ECB and the Fed?ABN AMRO
ECB: Markets largely expect status quo over coming quarters * FED: OIS forwards suggest October cut a done deal, but question mark over December

How to Tax Tech MonopoliesBB
A 19th-century proposal to prevent landlords from gaining excessive wealth could have digital applications.

Global debt flows: Sweet spot comfort for risk assets ING
Latest bond flows are consistent with more buying of risk, albeit at a slower pace. Even where flows have slowed, total returns have not - local currency emerging market outflows contrast with accelerated positive total returns. Inflows to US bonds remain firm, with USD allocation now very elevated. Inflows to corporates (incl high yield) remain firm too

Snus Can Save People From Cigarettes. Just Ask Sweden.BB
Swedish men have the lowest rate of lung and oral cancer in Europe. And snus — while certainly not risk-free — are about to get a big push in the U.S.