It
is high time for the EU to unlock the fiscal side of its macroeconomic armoury
A
$110 billion fund won’t help Europe’s lagging tech sector compete against the
U.S. and China.
Bershidsky: Hungary Is Happy to Be Germany's Gatekeeper – BB
In
1989, the Hungarians pushed an Iron Curtain open. This time, Orban has slammed
it shut.
Euro
area: PMIs still painful – Nordea
The
rebound in the Euro-area PMIs was mildly positive news, but the details remain
worrying. The Euro-area economy is too weak to generate meaningful inflation
pressures, which means the ECB needs to do more.
EUROPEAN CENTRAL BANK
For
bond investors, the list of never-seen-before happenings is only getting
longer.
Governing
council considered economic stimulus measures at July meeting, minutes show
ECB
Watch: It will be a package deal – Nordea
The
account from the July meeting confirmed that the ECB is preparing an easing
package for the September meeting. While the central bank does not appear
overly concerned about the outlook, it is determined to show it is not out of
ammunition.
ITALY
Italy’s
governments are mostly to blame for the country’s problems — but the EU should
tread carefully.
Prime
Minister Giuseppe Conte is quitting, but don't expect that to put an end to the
country’s political crisis.
Elections
or a fresh coalition may follow the prime minister’s departure
Five
Star insists on its reform agenda as country’s president considers options
GERMANY
The
German government is getting ready to act to shore up Europe’s largest economy.
Finance
Minister Olaf Scholz's 50 billion-euro idea is only a contingency plan at this
point.
Economy
has gone from being the powerhouse of the region to one of its laggards
A
lack of political ambition, reform and investment when times were good have
hobbled the country
It’s
taken the threat of a German recession to get the promise of German stimulus.
This isn’t how a monetary union like the euro zone is meant to work.
Germany:
rethinking the national ideology of balanced budgets – FT
As
the economy flirts with recession, Angela Merkel is under pressure to boost
spending
Can
Germans Get Over Their Allergy to Stimulus Before It’s Too Late? – BB
Merkel’s
government has began debating measures, but needs to curry public support.
Germany
in Uproar as Negative Rates Threaten Saving Obsession – BB
Finance
minister looks into possible ban on deposit charges * Steps to limits banks’
options could escalate spat with ECB
UNITED STATES
It’s
getting harder to ignore the threat this president poses to the U.S. and world
economies.
The
U.S. president’s canceled visit to Denmark is part of a weird fixation on the
Nordic countries that hurts America’s interests.
FEDERAL RESERVE
Fed
Watch – A quicker pace of Fed rate cuts – ABN
AMRO
We
now expect the Fed to cut at all three remaining 2019 meetings
Why
the Fed will keep cutting – ABN
AMRO
The
manufacturing sector – which tends to drive the business cycle – is weak and is
likely to weaken further. This is
feeding through to slower jobs growth, dampening consumer confidence. This will
ultimately drive a broader slowdown (but not a recession). Given the looming
slowdown and in the absence of inflationary pressure, we now expect the Fed to
cut 25bp at all three remaining FOMC meetings this year. Previously, we
expected two further cuts by Q1 2020
President
Trump urged the fed to cut interest rates by at least 1 percentage point.
The
Fed chairman’s speech on Friday is an opportunity to reset expectations in
large or small ways.
OTHER
Global
Economic Update
– Danske
Bank
Stuck
in the mud but no hard landing yet
Dealing
with the next downturn – BlackRock
From
unconventional monetary policy to unprecedented policy coordination
The
boldness and persistence of the demonstrators in Hong Kong have captured the
attention of the world.
Is
the technology more of a marketing stunt or part of the solution to global
warming?
TRADE WAR
G7 MEETING
TRADE WAR
Trump
raises Chinese tariffs after stocks tumble – FT
President
orders US companies to look for ‘alternative’ to China and faults Fed
Trump
Raises Tariffs on China as Frustration Mounts Ahead of G-7 – BB
Tariffs
on $250 billion in existing tariffs to go to 30% * Follows Chinese retaliation
to earlier Trump tariff move
Time
is running out for Trump to cut a trade deal – ING
The
latest escalation of the trade war is no surprise, but Donald Trump should
hurry up to secure a trade deal before his battle for re-election really takes
off
Lowest
trade levels since 2017 as China announces retaliatory tariffs – ING
World
trade growth confirmed a negative trend in June as volumes declined by -1.4%
month-on-month (CPB). The outlook for trade was already uncertain, but the
additional Chinese tariffs of US$75bn announced today add to likely
sluggishness in trade in the second half of the year
China
hits back with surprise tariffs – ING
China
has eventually retaliated with tariffs but this retaliation is far from the
last. Very soon, we expect American companies to be included in China’s
“unreliable entity list”. If the trade talks in September don't make much
progress, we think USD/CNY to move closer to 7.10 level or even cross 7.10
briefly
Inside
Macron’s Plan to Control G-7 and Lecture Trump on Climate – BB
EU
leader prepared a containment plan for U.S. president * Merkel sees Trump as
wounded by fallout from China trade war
Macron
Rips Up Agenda for His G-7 in a Fit of Climate Fury – BB
French
president threatens to sink trade deal with Mercosur * Merkel says Macron’s
threats are not appropriate response