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Friday, November 2

2nd Nov - Good US jobs report




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EUROPE
Eurozone: Politics in motion, weaker growth momentumING
With Merkel throwing in the towel and the Italian government still not yielding to the European Commission's budget pleas, Eurozone governance is becoming increasingly hard. And the slowing growth momentum won't help either

Flagging growth amid rising political headwindsDanske Bank
Growth weakness broadens out to service sector * ECB driven by strong political will to end QE by year-end * Italy’s budget fight with the EU intensified

Euro area unconventional monetary policy and bank resilience BIS
The results suggest that, above and away from the zero-lower bound, looser interest rate policy tends to weaken our measure of euro area banks' loss-absorbing buffers.

  GERMANY
Ashoka Mody: Angela Merkel’s TragedyProject Syndicate
History dealt German Chancellor Angela Merkel massive challenges: a series of eurozone crises that drove wedges between Europeans; social fragmentation fueled by economic tensions; and the largest migration wave since World War II. Rather than resolve them, however, she chose merely to manage them.

The curbs on Angela Merkel will also bind her successor’s hands
FT
Her caution gave birth to the German verb ‘merkeln’, meaning ‘to hold off on a decision’

Merkel rival tries for comeback as CDU leader FT
Friedrich Merz would change the party’s direction with his strong views on immigration

Pondering a post-Merkel Europe Reuters


UNITED STATES
Macro Update: New Employment Among Highest Since 2000 Fat Pitch
The macro data from the past month continues to mostly point to positive growth. On balance, the evidence suggests the imminent onset of a recession is unlikely.

US: What now for the President’s plan?ING
The US economy remains very strong, but the prospect of additional fiscal stimulus will be limited if the Democrats win control of the House of Representatives curtailing the President's legislative agenda, with the risk that he steps up attacks on trade partners


  OCTOBER PAYROLLS
U.S. Payrolls Rise More Than Forecast as Wage Gains Hit 3.1% - BB
Unemployment rate holds at 3.7%, lowest level since 1969 * Data reinforce outlook for gradual Fed interest-rate hikes

US wages grow at fastest pace since 2009FT
Trump hails ‘incredible’ 250,000 jobs gains in October in final report before election

Just How Good Is the October Job Market? Here’s How It Compares WSJ

The U.S. Jobs Report Is Almost Too Good BB
The largest economy charges ahead while the rest of the world stumbles. That disconnect is dangerous.

El-Erian: 7 Takeaways From the U.S. Jobs Report BB
The strong performance, along with more business investment and fiscal stimulus, will turbocharge the economy.

US Labour Market comment: Strong job report Nordea
The US labour market continues to strengthen and job gains at 250k stronger than expected. Report show no signs of any slowdown in the US economy. Wage growth continues to edge up and set the stage for a fourth rate hike this year in December.

  FEDERAL RESERVE
Federal Reserve preview: Sticking to the script
ING
While no longer described as 'accommodative', monetary policy is far from restrictive. A strong domestic story means the Federal Reserve will continue to signal “gradual” rate hikes ahead, setting us up for a December move and then three more hikes in 2019

Fed preview: Setting the stage for a December hikeNordea
Next week’s FOMC meeting will leave rates unchanged before another hike in December. The statement will be closely watched for signs of sensitivity to the decline in the stock market. Changes to the communication are set to be modest however.

  ELECTIONS
Gridlock in Washington and the markets Pictet
Political gridlock has been good news for US stocks in the past, but Tuesday’s midterm elections come at a time of rising doubts about market prospects.

Five Things to Watch on Election DayBB
From women candidates to weed legalization, the midterms will have plenty of intriguing subplots.

US mid-term elections: Feeling Blue? ING
The mid-term elections are less than a week away and opinion polls continue to suggest the Republicans are under pressure. The loss of Congressional control would make life increasingly difficult for President Trump and have major implications for policy. Here we revisit the possible election scenarios and assess their market implications


OTHER
Monthly Executive Briefing: The return of volatility Danske Bank
Italian woes continue to linger in the background with further EU-Italy stand-off ahead * Brexit negotiations failed to reach a breakthrough * The US-China trade war is on hold for now but remains unresolved * Global risk sentiment took a hit from a combination of political risks and fears of the business cycle ‘rolling over’

The myth of monetary sovereignty
Frances Coppola

  CHINA
Trump Says He Thinks U.S. Will Reach Trade Deal With China
BB
President has asked key officials to start drafting deal terms * Markets rise on prospects of talks to defuse trade war

Trump Risks Backlash in Zeal for Deal to End China Trade WarBB
Lighthizer said to be opposed to push for G20 accord * Chinese wary of Trump’s history of backing out on agreements

China: Trade war and geopolitics ING
Trade war and geopolitical tensions continue to escalate between the US and China, but increasing concerns around Taiwan could risk intensifying the situation

US-China Trade - 60% chance of ceasefire at Xi-Trump meeting Danske Bank
Trump signals he may be ready for a trade war ceasefire at the Xi-Trump meeting on 1 December.

Editorial: A New Direction for China’s Belt and Road BB
The massive infrastructure development program needs a course correction.


REGULARS
EU Open RundownRANsquawk

Brussels Edition DailyBB
Banks under stress

Eco Day Europe BB
Trump Wants Truce, Brexit Talks, China's Global Role

WSJ Daily EconomicsWSJ
U.S. Jobs Numbers On Tap, Trump Signals Progress With China

Danske DailyDanske Bank
Market cheered by US-China trade talks

Daily Market CommentMarc Chandler
Greenback is Unable to Recover Ahead of Jobs Report

Brussels PlaybookPolitico
Confident Italy — London’s wishful Brexit leaking — Who’ll quit next in Germany

Five Things You Need to Know to Start Your DayBB

US Open RundownRANsquawk

AamukatsausNordea
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