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Sunday, August 11

9th Aug - Still nervous #4157


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EUROPE
Ferdinando Giugliano: Italy Faces Its Moment of Truth on the Euro
– BB
Matteo Salvini won’t be able to hide behind Giovanni Tria and Luigi Di Maio now. He’ll have to show exactly where he stands on fiscal policy and Europe.

Three political scenarios for Italy with FX and rates implications – ING
The collapse of Italy's ruling coalition opens the way for three possible scenarios: new elections, an extension of the current coalition or a new technocratic government. Timing will be crucial, given the proximity to the budget season. Rising political uncertainty is likely to prompt a widening in the 10Y BTP-Bund spread and to weigh on the euro

Italian Political Turmoil Provides a Reminder of Economic Pain – BB
Country’s economy grew in just one of last five quarters * Salvini-headed government is likely to renew clash with EU

Russia View: Five years under sanctions – Nordea
Over the last five years, the Russian economy has been on a much lower trajectory compared to previous growth cycles. Poor demographics, weakness in the business climate, and tighter fiscal and monetary policies are the primary reasons we see for the sluggish growth, but we believe sanctions have also played a non-negligible role.

The UK economy contracts – should we be worried? – ING
Firms unwound stock levels during the second quarter, tipping the UK into negative growth for the first time since 2012. Decent consumer spending suggests a technical recession should be avoided, but the potential for business investment to decline further is still a cause for concern

Depositors Are Next as Nordic Banks Buckle Under Negative Rates – BB
Nordea’s main investor says retail depositors can’t be spared * Likelihood of cost being passed on is seen as much higher now

Merkel Party Head Says Balanced-Budget Goal Remains in Force – BB


OTHER
Central Banks Cry for Budget Help, But Only Some Are Getting It – BB
Bloomberg’s global fiscal guide shows who’s adding stimulus * China, U.S. lead way as German austerity holds Europe back

Trump Still Has Plenty of Ways to Escalate His China Trade War – BB
Targeting the dollar, more tariffs give scope to add pressure * Market turmoil may temper use of tools to leverage on Beijing


REGULARS
Five Things to Start Your Day Asia – BB

Eco Day Asia – BB
Trump’s Dollar Dismay, RBNZ’s Orr, Even More Rate Cuts * Trade woes to last decades, Australia’s top bureaucrat says * U.S. holds off on Huawei licenses as China halts crop-buying

Five Things to Start Your Day Europe – BB

EU Open Rundown – RANsquawk

FirstFT Daily Briefing – FT

Brussels Playbook – Politico
Italy on the brink — Migrant crisis repeating — Neigh it ain’t so

Danske Daily – Danske Bank
Italian government close to an end: Salvini calling for parliamentary vote of confidence *

Eco Day Europe – BB
ECB’s Headache, U.K. Growth, BOJ Stimulus Chances * U.K. government delays its full spending review to next year * RBA stands ready to cut rates further on subdued inflation

Daily Market Comment – Marc Chandler
PBOC Continues to Check CNY Fall While Euro has Shrugged Off Italy's Political Turmoil

Five Things to Start Your Day US – BB

US Open Rundown – RANsquawk

Eco Day US – BB
Trump's Trade-War Toolkit, Shrinking U.K., ECB Outlook * Trump still has plenty of ways to escalate his China trade war * U.K.’s second-quarter slump raises Brexit stakes for Johnson


FINNISH
Aamukatsaus – Nordea
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