It's a holiday in Finland, and the weather is nice. So perfect time for me to get some work done in a deserted city and keep blogging light for the day.
Today: more on China, Europe's summits have agreed to use the ESM to bail out banks. My guess on the number of drowned people in Finland during the holiday weekend? 10 (ten).
Previously on MoreLiver’s:
Special: Fed Watch (updated)
Roundups
News roundup – Between The
Hedges
The 6am Cut London – alphaville
/ FT
Emerging Markets
Headlines – beyondbrics
/ FT
Asia Morning MoneyBeat: When It Rains… – WSJ
Europe Morning MoneyBeat: Fifth Week Of Losses Looms
For Stocks – WSJ
MORNING BRIEFINGS
3 Numbers to Watch: BoJ governor, EZ current
account, ECOFIN – TradingFloor
Juhani Huopainen: Bank
of Japan's Kuroda might sooth the markets, the
Eurozone's current account surplus is expected to have tumbled and the ECOFIN
should come to an understanding on who will pay banking losses and how they
will do so.
European markets are
expected to open marginally lower on Friday. With a light economic calendar
today, traders will keep an eye on the Eurozone current account balance and UK public finances due later today for further
risk appetite direction.
Danske Daily – Danske
Bank (pdf)
Markets will
continue to digest the outlook for Fed tapering. There are no key figures of
significance today.
EUROPE
Eurozone bailout fund to prop up banks from
2014 – euobserver
The eurozone's bailout
fund will be able to directly prop up weak banks from next year, after
ministers reached agreement on Thursday night.
Comments on the future
direct recapitalization of banks by the ESM, the Single Supervisory Mechanism
for European banks, the German legislative process for the transfer of banking
supervision powers and the domestic political situation in Greece. He spoke after the Thursday’s meetings.
Euro Chiefs Recommit to Crisis Strategy as
Global Markets Plunge – BB
European governments
recommitted to their recipe for fixing the economy, dismissing concerns that
plummeting global markets would spark renewed turmoil in the crisis-hit euro
zone.
Ministers bid to bridge divide on bank rescue
funds – euobserver
EU finance ministers
will meet in Luxembourg on Friday aiming to agree a new regime to wind down
failing banks, in the latest attempt by politicians to break the so-called
'doom loop' between indebted banks and sovereigns.
ECB Bank Oversight Start Said to Be Delayed to
Late 2014 – BB
The ECB probably won’t
take over as euro-area bank supervisor until the final months of 2014, further
delaying the banking union that leaders wanted in place quickly to stem the
sovereign debt crisis.
Analysis: Creeping mistrust stops euro zone
banks lending to peers across bloc – Reuters
Euro zone banks are
refusing to lend to peers in other countries in the common currency bloc,
signaling a worrying fall in confidence that appears to have worsened since the
Cyprus bailout earlier this year, data analyzed by
Reuters showed.
ASIA
BOJ Beat: Board Divided Over Inflation Target – WSJ
The Bank of Japan's
policy board has backed the bold monetary easing program of its new governor,
Haruhiko Kuroda. But how they feel about his goal to achieve a 2% inflation
rate in two years is a different matter.
BOJ's Kuroda: Markets will stabilize over time – Reuters
The old Chinese model has run out of road – The
A-List / FT
Stephen King: Before
the onset of the global financial crisis, China could be relied upon to export its way out of
trouble. Year after year, its exports grew at an annual rate well in excess of
20 per cent. As its current account surplus rose, its economy expanded with a
swagger that became the envy of the world. Now, however, China’s export growth has faded, its current account
surplus has almost disappeared and Beijing has had to search for alternative sources of
rapid economic expansion.
China’s financial system is in the throes of a cash squeeze as the government
tries to restructure the economy and punish speculators, with interbank lending
rates spiking on Thursday and bank-to-bank borrowing nearly stalled.
Chinese cash rates
spiked as high as 25 percent for a second day on Friday as banks scrambled to
secure cash, but fears of a broader banking crisis eased on speculation the
central bank had quietly added funds to the market.
In China it’s not often you get a big-time business
leader offering advice to the country’s finance regulators in the pages of the
Communist Party’s mouthpiece newspaper. But that’s just what happened Friday
morning.
OTHER
Rates morning
comment: Higher market rates and the ECB – Nordea
Will higher rates prompt an ECB reaction? * Recovery is finally on the way in the Euro
area * Norges Bank: No rate change, but might cut in September