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EUROPE
The
growth outlook is positive and over time growth should feed into somewhat
higher inflation, allowing the ECB to withdraw monetary stimulus. Cautious rate
hikes are for 2019.
Europe’s Desired Oversight Body Needs the Right
Name – BB
‘European Monetary Fund’ is said to draw
objection from ECB * Commission President Juncker used the term in Sept. 13
speech
Poland's Authoritarian Shift Spurs Warning of
Economic Trouble – BB
Investors fret about Polish
justice, top EU official says * Timmermans speaks in interview before Sept. 25
EU talks
GERMANY
German election update: Merkel’s coalition partner(s) matter – Nordea
While Merkel will almost
surely secure herself another 4-year term, her coalition partner matters for
the policy choices made. Bond yields and the euro would have more upside
potential with SPD or the Green Party in the government.
Germany’s Most Likely Coalitions Probably Won’t
Help the Economy – BB
Bloomberg survey of 26
economists examined policy outlook * CDU/CSU and Free Democrats best for
economy, third-most likely
One Million Refugees Came - Here's What Happened
Next – BB
Germany has done much to integrate the newcomers, but politics and bureaucracy have left too many without options.
Germany has done much to integrate the newcomers, but politics and bureaucracy have left too many without options.
EUROPEAN
CENTRAL BANK
Target2 balances
reflect euro area’s potential to be better than traditional exchange rate peg
regime
– FT
ECB Bond Reinvestments Could Be Shock Absorber
as QE Decelerates – BB
About 15 billion euros a
month of holdings will mature in 2018 * Board member Praet says stimulus
reduction must be orderly
Annual inflation up to 1.5% in the euro area – Eurostat
UNITED STATES
Frustration With Republicans Drove Donald Trump
to Deal With Democrats – WSJ
OTHER
Deutsche Bank:
"Global Asset Prices Are The Most Elevated In History" – ZH
Financial
markets continue to doubt the tightening plans of the Fed and also the Bank of
England longer into the future, but expect the ECB to be able to withdraw
stimulus at a faster pace. History strongly suggests this will not happen.
Both
implied and realised volatilities have recently traded close to historic lows.
Significantly higher volatility is not warranted in the near future. We find
pricing covering the ECB October meeting too rich.
Yen Weaker After Abe Decides To Hold Snap Elections – ZH
Dollar and Rates Bounce Imminent? – Macro Man
FX weekly: Honey,
I shrunk the balance sheet – Nordea
A
balance sheet run-off decision seems obvious from the FOMC this week, but 10 $
bn. pr. month initially won’t matter for the USD. But for other reasons we
could be about to see a less benign flow picture for the EUR in the coming
weeks and months.
Key Events In The
Coming Week: All Eyes On Fed Balance Sheet Announcement – ZH
Harvey and Irma
Have Global Market Implications – BB
The
fallout for investors is likely to include a delay in the normalization of
interest rate policies and a further weakening of the dollar.
The
classic rationale for flexible exchange rates was that policymakers would be
unconstrained by currency targets. The Great Recession, however, saw numerous
central banks constrained instead by the zero lower bound. This column
considers which exchange rate regime is best for small open economies in a
global recession. The model suggests that if the source of the shock is abroad
and foreign interest rates become constrained at their zero lower bound, then
flexible exchange rates do provide a great deal of insulation to the domestic
economy.
China Economic Outlook: Towards the Party Congress and beyond – Nordea
China’s near-term growth prospects have remained robust and we expect GDP growth above 6% to continue in 2017-2019. The immediate economic impact of the Party Congress in October is estimated to be small.
China Economic Outlook: Towards the Party Congress and beyond – Nordea
China’s near-term growth prospects have remained robust and we expect GDP growth above 6% to continue in 2017-2019. The immediate economic impact of the Party Congress in October is estimated to be small.
RECREATION
Bridgewater’s Ray Dalio Spreads His Gospel of ‘Radical Transparency’ – NYT
Mr.
Dalio has created an unusual and confrontational workplace at Bridgewater
Associates, the
world’s
largest hedge fund firm. With a new book, he hopes to inject his ideas into the
mainstream.
Wall Street turns 30
this year. Is the movie’s hero a miscreant or a role model?
REGULARS
Morning Report APAC – TF
Investors on Wall St largely shrugged off the most recent North Korean
provocation as they pushed key indices higher. Meanwhile there's plenty of
factors at play in commodities markets. And markets are keenly awaiting the
outcome of this week's Federal Open Market Committee meeting.
FirstFT Daily Briefing – FT
Pressure on Facebook, Slack's $5bn valuation, surviving the open plan
office
WSJ City – WSJ
May in Trans-Atlantic Trade Spat, Qatar Deal Boosts BAE, Three Speeches
to Shape Europe
“Best of the web” daily
charts – Lukas Daalder
Danske Daily – Danske Bank
Eye-Opener – Nordea
Final Euro-area inflation today, FOMC meeting in focus this week * Market
pricing of Fed and the dot plot are out of sync * Slight negative EUR/USD bias
Morning Markets – TF
Last week’s Bank of England hawkishness the retreat from North Korea-inspired
risk-off Wednesday’s Federal Open Market Committee meeting and the expectation
of an imminent purchase taper from the European Central Bank have combined to
depress core bond prices.
From the Floor – TF
It's a big week for central banks as the ramifications of the Fed's
recent hawkish signals continue to unfold and markets prepare for its FOMC
meeting on Wednesday as well as a flurry of news from the Japanese, Australian,
Norwegian and South African banks.
Daily Market Comment – Marc Chandler
More Thoughts from Berlin
Brussels Playbook – Politico
Tech’s political immunity ends — United Nations week — António Costa
interview
US Playbook – Politico
Five Things You Need to
Know to Start Your Day – BB
North Korea pressure campaign * China’s capital control opening * Brexit
battles * Markets rally
US Open – ZH
Global Stocks Storm To New Record High Ahead Of Historic Fed Announcement
Frontrunning – ZH
FX Update – TF
Currency markets are eyeing the FOMC and BoJ this week after massive
recent upgrades of the policy paths for the Bank of Canada and Bank of England.
The Fed expectations for balance sheet reduction are likely priced in but how
will the Fed deal with the market’s second-guessing of its longer-term
forecasts?
FINNISH
Aamukatsaus – Nordea
Fed kokoustaa keskiviikkona - Taseen supistaminen alkaa *
Venäjän keskuspankki leikkasi ohjauskorkoaan 8,5 prosenttiin * Punta jatkoi
vahvistumistaan