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EUROPE
With credit constraints both in the household and the firm sector, fiscal
consolidation would be largely responsible for the weak growth performance
during 2011-2013. Postponing the fiscal consolidation to a period of
unconstrained monetary policy would have avoided most of these losses.
Fiscal devaluation without wage growth will trigger bad side effects both
at home and abroad.
The U.K. turning its back on Europe would risk reviving the “German
question.”
PORTUGAL
Portugal Seeks Leader as Coelho Government Ousted After 11 Days – BB
EUROPEAN CENTRAL BANK
The ECB proposed several amendments to its banking regulations on
Wednesday that could force some lenders to build capital more quickly than
expected.
UNITED KINGDOM
UK unemployment falls but wage growth disappoints – TF
Lowest unemployment rate since 2008 indicates tighter labour market – Danske Bank
Carney Vows to Fix Finance Fault Lines and Build Global Markets – BB
How Successful Was Carney's Forward Guidance? – BB
The Brexit Balance Sheet – Project Syndicate
European views on the UK’s renegotiation – Europp
UNITED STATES
OTHER
The policy divergence
theme is back with a vengeance, after taking a brief time-out after Fed’s
dovish hold in September. Now, ECB seems likely to err on the dovish side,
while the Fed seems dead set to hike rates. The potential impact from the first
rate hike in the world’s main reserve currency in almost 10 years should not be
understated.
Over the last month, it
has become increasingly likely that the Fed will start hiking in December and
that it will be on its own, even more so than previously assumed. The BoE’s
lift-off seems to be postponed while new easing measures are expected from the
ECB. The BoJ has, like the ECB, been surprised by low inflation, but seems
unwilling to expand its QE.
REGULARS
U.S. Stocks Mixed Amid Pressure on
Apple
Stocks Push Higher; Chinese Data in
Focus
Dollar Doldrums Expected To Abate in
2016
Portugal’s newly appointed minority
government ousted…political situation to remain unstable with high risk of
fiscal slippage * Prime Minister Cameron sets out pillars of UK’s renegotiation
of relationship with EU
New financial forecasts * Increased
QE2 expectations send yields lower * EUR/USD at a 6-month low
Alibaba said it would
blast beyond the $9.3 billion record from last year's #SinglesDay and delivered
by lunchtime. Now it's a question of how high the figure can go as we keep an
eye on the New York open.
Corrective Forces Dominate
While last Friday's knockout jobs
print has been cut down to size by any number of commentators, a raft of new
data from the US show that the country's economy is indeed fairly solid and
could likely absorb a Fed rate hike.
Merkel “reasonably
confident” EU reform deal can be reached as Eastern Europe reacts strongly
against migrant benefit proposals * Attention turns to feasibility of migrant
benefit proposals following Prime Minister’s EU speech * German government in
row about Dublin regulation for Syrian refugees * Portuguese leftist parties
force resignation of centre-right minority government * Carney says he will make
outcome of the EU referendum work no matter what it is * UBS Chairman: Brexit
“won't undermine the UK as a financial centre” * Czech deputy head of
government demands exclusion of Greece from Schengen * Eurozone reaches
agreement on financing of single bank resolution fund * Three cases launched
against ECB Quantitative Easing at the German Constitutional Court * Greece
eyes returning to the markets in second half of 2016 * EU set to delay
introduction of MiFID II rules by up to a year
New PMs — Migration
summit — Dear Donald
The USD reverses its latest gains
and shows a disappointing lack of momentum for the bulls. No major technical
lines in the sand have been crossed yet, with GBPUSD today offering an
interesting test today of relative strength on important UK data.
Portugal has emerged as
a new risk factor in fixed-income markets after the government lost a confidence
vote, and signs of new risk-off sentiment are weighing on emerging markets,
while the dollar is consolidating its gains.
FINNISH
Uppoava
euro * Kiinan teollisuustuotannon kasvu hidastui * Riksbank on valmis
taistelemaan kruunun vahvistumista vastaan * USA:ssa korkomarkkinat tänään
kiinni veteraanipäivän vuoksi