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EUROPE
The Eurozone reforms with a decidedly integrating impact are going ahead.
There could be some potential consequences for the UK’s attempts to renegotiate
its EU membership.
The strong pound and labor-market slack support no change * But wage
pressures are building and the world's less scary
EUROPEAN CENTRAL BANK
ECB cutting through the lower bound - Danish experiences – Danske Bank
ECB Urges Caution on Giving EU States Budget Leeway Over Reforms – BB
Draghi Says ECB Ready to Act to Maintain Monetary Accommodation – BB
Draghi is half-way through his eight-year term – Politico
UNITED STATES
FEDERAL RESERVE
5 Things to Watch in Janet Yellen’s Congressional Testimony – WSJ
These confidential documents will haunt Yellen’s testimony – WaPo
Yellen’s Congressional Testimony—Live Analysis – WSJ
Yellen Signals a Fed Tilt Toward December Rate Increase – NYT
Yellen sees possible December rate rise, gradual hiking path – Reuters
Yellen Signals Solid Economy Would Spur December Rate Hike – BB
OTHER
Equity ETF flows appear to be turning, consistent with a stronger
ECB/Fed policy divergence theme. These flows are also consistent with the EUR
remaining a funding currency, as well as showing a negative correlation with
broader measures of risk appetite.
Much ink has been spilled on the topic of the first Fed rate hike:
when will it occur, how many hikes will there be, and so on, but isn’t the
first Fed rate hike “undiscountable” anyway?
The global economy is
not working properly. This column argues that to overcome suboptimal results,
global aggregate demand must be expanded, the gap between excessively large
pools of capital and huge unmet infrastructure needs must be bridged, and
finally, the distributional downside of rapid technological advances and global
integration must be addressed. Change will come only when a global vision is
put forth, coupled with political will.
Of 28 major central
banks around the world, analysts have missed the mark on 20 of them, or 71
percent, mainly by underestimating how low rates would go — but also the extent
of tightening by some banks.
REGULARS
U.S. Stocks Rise, Riding Oil Rally’s
Coattails
Stocks Rise Ahead of Yellen
Equity Investors Still Have Jitters
Positive markets sentiment, Yellen
and Draghi could give new clues * Focus on central bank speeches * Broad USD
gains yesterday * December lift-off fears send US bond yields higher
After last night's New
York bell, carmaker Tesla saw its shares jump by nearly 10% in the after-hours
session as investors waxed bullish on the company's prospects. The move
followed a bullish US day and preceded an even more bullish Asian session as
risk-on makes its electrifying return to world markets.
Brazilian manufacturing activity
collapsed in October, with the PMI hitting its lowest level since the Great
Recession, but the real has firmed and Brazilian stocks risen on valuations.
Saudia Arabian PMI fell in October to the lowest reading since the data series
began in 2009. Zambia raised rates. And market-implied expectations for a
December Fed rate hike now stand at 50%.
Merkel: On EU, “British
concerns are our concerns” * Austrian Foreign Minister: British EU reform
proposals could be “chance for the whole EU, and we should use it” * CBI Board
warned UK government about overplaying hand in EU negotiations * CSU drafts
constitutional expert to prepare case against Merkel’s refugee policy * Ruparel:
Cameron would struggle to sell limited restrictions on EU migrants’ access to
benefits * Draghi warns failing to complete banking union will repeat mistakes
made when Euro was created * Boris Johnson insists he will wait and see outcome
of EU reform before deciding how to vote in EU referendum * French PM: Debate
over TTIP “far from over” * Half of London homeowners believe Brexit would
boost house prices * Large international
banks warn of impact on City from Brexit
Merkel backs two-speed
Europe — Migration migraines
Global Rally Continues
After PBOC "Unintentionally" Sparks Market Surge With Stale News,
Largest 2015 IPO Prices
The USD faces a test from key data
today, especially the October ADP payrolls change and the ISM non-manufacturing
survey. Elsewhere, after a surge in risk appetite in Asia overnight, currency
traders are playing up the carry trade with notable lack of participation from
the weak NZD.
Japan Post's $12 billion
IPO had us singing the Carpenter's in the office and From the Floor doesn't
pass up that kind of opportunity. Elsewhere, it's all building into NFP on
Friday.
FINNISH
EKP:n
lisäelvytys tarpeetonta? Draghi alleviivasi jälleen EKP:n seuraavan kokouksen
tärkeyttä * Kiina jatkaa pääomamarkkinoidensa avaamista ulkomaisille
sijoittajille * Fedin johtajat tänään estradilla
Kysynnällä on merkittävä vaikutus kasvuun, ja
digitalisaatio pikemmin supistaa teollisuusyritysten myyntiä.