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EUROPE
After the latest Fed
meeting markets have lowered their expectations as to what could be expected
from the ECB. This has caused curves to rise. As we still see the ECB
delivering a full package in December, together with the 33% limit applicable
as of today, we see a case for the curve going flatter.
On Friday, Q3 GDP
numbers for the Euro area will be published. A weaker outcome than 0.3% q/q
could strengthen those in the Governing Council advocating very aggressive
steps. A positive growth surprise will not keep the ECB from easing monetary
policy further as there are mainly downside risks to the outlook. Where there
is a will to easy policy further, there is a way – and low inflation
expectations are the key justification.
EUROPEAN CENTRAL BANK
ECB publishes new statistical report on the Household Sector – ECB
Household sector report 2015 Q2 – ECB
UNITED KINGDOM
Cameron says sometimes 'less Europe' is better – Reuters
Cameron Confident of EU Reforms as He Seeks to Keep Britain in EU – BB
David Cameron demands a ‘changed’ EU — or Britain bolts – Politico
Cameron’s letter: European views on the UK’s renegotiation – Europp
Open Europe responds to Cameron’s letter – Open Europe
UNITED STATES
OTHER
The policy divergence
trade has returned with a vengeance over the past few weeks. We now find
ourselves in a waiting game. Will risk appetite worsen, prompting unwanted EUR
strength?
While the Fed retains
the possibility of raising rates in December, the ECB is preparing to launch
another easing package in its next meeting. Despite these seemingly
contradictory central bank stances, bonds should continue to be supported.
Stiglitz & Guzman: A
Step Forward For Sovereign Debt – Social Europe
Monetary policy and
financial spillovers: losing traction? – BIS
Modelling the time-variation in euro area lending spreads – BIS
REGULARS
U.S. Stocks Fall, as Market Mulls
Rates
Stocks Edge Higher
Should the Fed Really Move in
December?
Chinese inflation lower than
expected, Asian risk appetite retreating * Is the ECB’s Governing Council
pondering big cuts? * Danish and Norwegian inflation out today
Consumer price inflation
(or the lack thereof) will colour European trading sentiment today with both
Italy and Norway releasing their latest CPI updates. China will attract
attention too on the heels of its unexpectedly poor CPI reading and ahead of a
key number on industrial production early tomorrow.
Chinese inflation measures came in
weaker than expected, China's GDP deflator is in the red, and Chinese business
confidence is at an all-time low for the indicator. All this means that the
People's Bank of China is likely to ease further.
Cameron argues UK can
have best of both worlds as he sets out key UK EU renegotiation demands * New
government figures suggest 43% of new EU migrants to UK claim benefits in first
four years * EU plans to set up refugee-processing centres in Western Balkans *
EU Court of Auditors finds EU spending “materially affected by error” * Germany’s
AfD on record-high 10% in new poll, while Merkel’s party continues to shrink * EU
member states criticise European Parliament for ignoring obligation to cut
staff numbers * Eurozone finance ministers hold off on disbursement of next
tranche of Greek bailout * Italy’s public spending czar resigns
Cameron’s big day —
Catalonia multi-crisis
Global Stocks Fall For
5th Day On Disturbing Chinese Inflation Data; Renewed Rate Hike Fears; Copper
At 6 Year Low
The USD bulls are looking for the US
dollar to follow through higher after last week’s boost on strong US data.
Today’s calendar is a thin affair, with Norway’s CPI release the only event
risk likely to trigger notable market reaction.
The impact of Friday's
nonfarm payrolls release is still being felt as markets digest the implications
of a stronger USD and an imminent Fed rate hike. What's new, however, is an
ultra-dovish statement from the ECB signalling a potential rate cut in December
– are Draghi and Yellen set to diverge further still?
FINNISH
Riksbankin
inflaatiotavoite tarkastelun alla * Euroalueen sijoittajien luottamus koheni
pitkästä aikaa * EKP:n talletuskoron laskeminen näyttää yhä todennäköisemmältä *
Ruotsin kotitalouksien kulutus kasvoi aneemisesti