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Wednesday, October 24

24th Oct - US Open: Bad Europe, Fed ahead

The European economic data (PMI and Germany’s IFO) were terrible and markets reacted accordingly. Draghi’s comments are still ahead, and later the Fed’s FOMC conclusion. See my previous posts’ US sections for additional commentary – don’t expect much from the Fed, though.


Previously on MoreLiver’s:

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Roundups & Commentary
US Opening News And Market Re-Cap – Ransquawk / ZH
Frontrunning – ZH
Overnight Sentiment: Chinese And European PMIs... And GreeceZH
The Lunch Wrap – alphaville / FT
Emerging N.Y. headlines – beyondbrics / FT
Today’s front pages – presseurop
Daily press summary – Open Europe
Member states to consider plan to give non-euro countries stronger say in banking union; Commission drops cross-lending for national resolution funds

Morning MarketBeat: Selloff Sparks Shades of 2011 – WSJ
Broker Note Briefing – WSJ
Euro Slide Continues, Dollar-Bloc Resilient – Marc to Market
Kim Kardashian and the FedTF Market Advisors

US session ahead
Pre-market Commentary – Marketwatch
Pre-Market Trading – CNNMoney
Pre-Market – NASDAQ
Earnings & Events – The Street
MarketCurrents – Seeking Alpha

Reference
Debt crisis: live – The Telegraph
The Euro Crisis Blog – WSJ
Tracking Europe’s Debt Crisis – NYT
FX Options Analytics – Saxo Bank
European 10yr Yields and Spreads – MTS indices


EUROPE
Europe’s Path to DisunityHans-Werner Sinn / Project Syndicate
The assertion that the eurozone could be transformed into a United States of Europe is no longer convincing. The path toward it is far more likely to lead to a deep rift within Europe, because turning the eurozone into a transfer and debt union would require more central power than currently exists in the US.

Chart of the week - Economic convergence in the euro areabruegel
Current accounts are moving towards balance…Fiscal balances are mostly moving towards a more sustainable zone, albeit with difficulty in the case of Greece…Nominal unit labour costs are mostly going down (with the exception of Italy) in the periphery and up in Germany, even if the gap between the level of Germany and that of the other countries is still large.

EU commission tables financial tax for 11 stateseuobserver
The EU commission has proposed that 11 countries move ahead with a common financial transactions tax, after years of wrangling failed to produce an EU27 deal.

The S&P downgrade ratio in Europe – 4:1alphaville / FT
The S&P team are nervous. Some $1 trillion of debt from European companies will mature in 2013, and then another $1.3 trillion in 2014 — a large chunk of this in the financial sector…

  EUROPE: PMI & IFO
(Seemingly) Perpetually Miserable Indicesalphaville / FT

October PMIs suggest euro zone downturn deepeningReuters
Euro zone businesses in October suffered their worst month since the bloc emerged from its last recession more than three years ago, forcing them to cut more jobs to reduce costs, surveys showed on Wednesday.

Euro-area PMI challenge expectations of improving outlookNordea
The Euro-area flash composite PMI dropped to 45.8 in October from 46.1 in September, and against expectations of a small rise. The drop was mostly due to downside surprise from the German manufacturing side, while the French numbers one average was in line with expectations (see chart), and services did alright across the Euro area.

Euro area: PMI and Ifo continue to signal recessionDanske Bank (pdf)
Euro area PMIs and  the German Ifo surprised on  the downside in October. We have
seen a stabilisation in the leading indicators but the releases indicate that the recession
is still not over.

Euro area flash PMI points to continued slowdown in OctoberASA

German IFO business confidence continues to fall in OctoberASA

German Ifo Business Confidence Unexpectedly Fell in October BB

Ifo Business Climate Continues to DeteriorateCESifo
Press release, with graphs and full breakdown

German business sentiment posts surprise sixth drop in a row Reuters
German business sentiment dropped for the sixth successive month in October, in a surprise fall that was bigger than even the lowest forecasts, signaling that the euro zone debt crisis is hitting home in Europe's largest economy.

USA
Bernanke Seen Attacking Jobless Rate With QE Until His Term EndsBB

OTHER
Nordea Risk Perception PublicationNordea
Modest deterioration in sentiment – baseline still gradual improvement (or straight to full pdf)

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