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EUROPE
Wolfgang Münchau: The single currency is a trap and eastern expansion
forced the EU to take its eye off the ball
With
a European transfer union on the cards, we can learn a lot from Germany’s
reunification – a transfer union of sorts. This column takes us through various
lessons, concluding that transfers would cement southern Europe’s lack of
competitiveness and drive Europe into permanent stagnation.
An ambitious goal, but few quick wins
Gunnlaugsson claims the country wouldn’t have rebounded as quickly had it
been in the bloc.
MIGRANT CRISIS
Merkel and Seehofer reach common ground – Politico
Merkel's Biggest Refugee Test Is Syrians Unwilling to Integrate – BB
Stratfor: Why Germany Cannot Stop the Flow of Migrants – Fabius Maximus
EUROPEAN CENTRAL BANK
Draghi Interview – ECB
Draghi claims euro is in the clear – Politico
Draghi Says Further Stimulus in December Remains 'Open Question' – BB
ECB will do what is needed to keep inflation target on track: Draghi – Reuters
Draghi Admits Global QE Failed: "Slowdown Probably Not
Temporary" – ZH
Typically, the main resistance to the adoption and implementation of
structural reforms stems from the vested interests of affected groups in
society. Besides this, the possible short-term economic and fiscal costs of structural
reforms are also sometimes mentioned as a reason for postponing their adoption,
suggesting a short-term trade-off between fiscal consolidation and reforms.
GREECE
ECB reveals capital hole in Greek banks as unpaid loans soar – Reuters
ECB's bank test shows third bailout likely to be smaller than planned –
ESM – Reuters
Greek Banks Face Skeptical Investors in Demand for Fresh Capital – BB
Greek Bad Debt Rises Above 50% For The First Time, ECB Admits – ZH
UNITED STATES
The Fed’s communication strategy is a mess, and cleaning it up is far
more important than the exact timing of its decision to exit near-zero interest
rates.
Our research suggests that the US Phillips curve is still alive,
supporting the Fed leadership’s view that labour market improvement should
eventually push inflation back to target. Our Phillips curve model suggests
that wage growth will pick up to around 3% over the coming year. Against this
background, we continue to believe that rising inflation pressures will imply
that the Fed will raise rates faster in 2016 and 2017 than is currently priced
in by markets.
This student of the Great Depression repeated a terrible mistake of the
Great Depression.
Surprisingly hawkish FOMC statement in October
OTHER
External imbalances have
narrowed; improvements expected to last * Managing high public debt in advanced
economies remains a key challenge * Joint policy actions would help further
rebalancing and growth
"Rising debt may or
may not lead to crisis but a collapse in nominal demand nearly always does.
China’s Official Factory
Gauge Signals Contraction Continues – BB
China's October factory,
services surveys show economy still wobbly – Reuters
Manufacturing Misses;
Nonmanufacturing Worst Since 2008 Despite – ZH
PMI signals bottom in
Chinese economy – Danske Bank
REGULARS
Stocks Edge Higher on Manufacturing
Data
Key Jobs Report On Tap This Week
USD weaker ahead of Fedspeak, rates
up but room for more * This week’s highlights: central bank policy meetings,
Fedspeak and US jobs report * Fed priced 50/50 for December hike * USD weakens
broadly, down from the range
Yet another miss from
China overnight has sent Asian stocks down leaving Europe braced for a fall.
It's no stunner, as far as
recoveries go, but given the scale of the Eurozone economy investors will be
happy to see the currency bloc continuing to plod onwards and upwards.
Merkel and Seehofer
build bridges although German grand coalition still divided over response to
refugee influx * Remain and Leave neck and neck in YouGov poll as French are
most pessimistic about future of EU * Osborne heads to Berlin to push for
safeguards for non-Eurozone states * European Commission to unveil stricter
rules on EU migrants’ access to benefits * FAZ: Juncker says German savings
banks will not be touched by deposit guarantee scheme * ECB sees €14.4bn
shortfall in Greek bank capital in worst-case scenario * IMF reiterates call
for Greek debt restructuring * Eurozone banks still holding €826bn in bad loans
* Erdoğan’s party re-gains absolute majority in Turkish parliament
Erdoğan’s big win —
Brexit turning point
Futures Rebound From
Overnight Lows On Stronger European Manufacturing Surveys, Dovish ECB
This week is the make-or-break week
until at least early December for USD traders, as the key US data is in the
driver’s seat now that the market seems to have given up paying attention to
guidance from the Fed.
The Turkish lira jumped
and the stock market rallied strongly after the AK Party won a stunning
election victory, which was seen as restoring one-party rule and boosting the
power of the president.
FINNISH
Kiina
matkalla normaaliksi * USA:n työmarkkinoiden vahva trendi tekee paluun * Tänään
luvassa USA:n ja Britannian teollisuuden luottamus * Euroalueen inflaatio
kiihtyi nollaan lokakuussa
Jos
Jean Monnet'n teoria kriisien EU:ta yhdentävästä vaikutuksesta pitäisi kutinsa,
liittovaltio olisi jo valmis. Nyt kriisejä on kuitenkin pulpunnut kuin
liukuhihnalta, ja Monnet'n oppi on lujilla. Näyttää käyvän toisin kuin piti:
nämä kriisit repivät eivätkä yhdistä.
Euroopan
unioni on erinomaisella säällä erinomainen yhteenliittymä. Mutta kun myrsky
iskee, nuotipiirin yhteishenki hiipuu olemattomaksi.
Ilman
Euroopan turvallisuustilanteen nopeaa heikkenemistä euron hajoaminen olisi
voinut olla vaihtoehto. Enää se ei ole muuta kuin niille, jotka kannattavat
heikkoa ja hajanaista Eurooppaa.
