3rd Aug - Weekender: Best of the Week

The best articles from the ending week. Last week’s ‘best’ here.

This was supposed to be a very important week. It wasn’t – we didn’t get any new policy announcements, and the data was mixed.

In Europe, there has been talk of an upturn after the July’s manufacturing PMI for the euro area showed an above-50 reading. Also confidence numbers were relatively strong. The ECB met on Thursday, but did nothing and said nothing. No minutes, no changes to forward guidance, no pledges, nothing on the FX rates. The current consensus view seems to be of a slow recovery in Q2. This opens up the risk of a negative surprises.

In US, the ISM manufacturing index was very strong, but employment report was mediocre. This could be the goldilocks – good outlook, but no reason to tune the monetary policy tighter. Before the week's events, a large part of the trading desks were looking for a September tapering, but it looks like the expectations have shifted to 50-50 split on Dec-2013 and early 2014. Asia’s slowdown was not discussed as heavily this week. Looks like we’re in for slow holiday markets.

Previously on MoreLiver’s:

Friday US Open

Friday EU Open - Jobs Friday

Special : ECB Watch (updated!)

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EUROPE

In Europe, the case for… optimism? – alphaville / FT

Is Europe Still in an Economic Downswing? – PIIE

The IMF has revised its economic forecast downward to −0.6 percent for 2013,1 making it unlikely that the real economy will turn worse in the short run. But the latest euro area economic data project a gradual and surprising recovery in the second half of 2013.

Spain and Italy Update – Marc to Market

The economic data suggests both countries are slowly recovering.   Nevertheless, there is cause for concern and, whether it is the end of the summer holidays or the German election in late September, Q4 may be more challenging for both countries.

  ECB

Measuring Mario Draghi’s Promises 1 Year On – MoneyBeat / WSJ

LTRO payback, Eonia tightening edition – alphaville / FT

ECB Officials Want Central Bank to Publish Minutes – WSJ

ECB Preview: Transparency on the agenda – Danske Bank (pdf)

You say you want ECB minutes? We got minutes – Money Supply / FT

  MACRO NUMBERS

Euro-Area Economic Confidence Jumps to Highest in 15 Months – BB

Euro-Region Unemployment Unchanged as Economy Improves – BB

Euro-Area July Inflation Holds at 1.6% as Recession Lingers – BB

UNITED STATES
IMF Concludes 2013 Article IV Consultation with the United States – IMF

"The Taper Is Coming" - What Wall Street Thinks – ZH

Consensus: September tapering start with ~$20 billion in initial reduction.

Fed Statement Tracker – WSJ

Fed Keeps $85 Billion QE Pace, Sees Risk of Disinflation – BB

  MACRO NUMBERS

Consumer Confidence Dips – WSJ

Economy in U.S. Expands More Than Forecast on Inventories – BB

Manufacturing in U.S. Accelerates More Than Forecast – BB

ASIA

China HSBC PMI dips to 11-month low in July – Reuters

Again, with the China PMIs divergence – alphaville / FT

OTHER

July Global PMI Scorecard – The Reformed Broker

Nominal GDP Targeting and the Zero Lower Bound: Should We Abandon Inflation Targeting? – Riksbank (pdf)

Sveriges Riksbank Working Papers by Roberto M. Billi

Inflationistas and the global supply shock – alphaville / FT

UBS argues this is mostly down to technological supply shocks. The world, it seems, is increasingly suffering from an abundance crisis rather than the archetypal scarcity problem most inflationistas would have you believe.

Guide to the Markets – J.P. Morgan

FINNISH

Ei kurjuutta kummempaa – Tyhmyri

Vielä olisi ehkä mahdollista pelastaa euro ja Euroalueen talous jos halua olisi

Vaarallinen elvytysharha – yhtä vaarallinen kuin säästämisen harha – tyhmyri

Varoitus: väkivaltaisia kansannousuja nähdään pian Euroopassa – SK

”Eurooppa on jo meidän silmissämme kriisialue, jonka avustamiseen varaudumme”, sanoo Punaisen Ristin Kansainvälisen Komitean (ICRC) pääjohtaja Yves Daccord.

Huippuekonomisti vaatii: EKP:n laskettava ohjauskorko nollaan – HS

Euroalueen velkakriisi kestää vielä ainakin kolme vuotta, ennustaa finanssiyhtiö Citigroupin pääekonomisti Willem Buiter.

Espanjan ehdotus voisi ratkaista eurokriisin – Paavo Teittinen / TalSa

Espanjan ulkoministeriö vaatii Euroopan keskuspankin rakenteiden muuttamista. Suomen pankin ekonomistin valaisemien tosiseikkojen nojalla on selvää, että ehdotuksen toteuttaminen voisi ratkaista eurokriisin.