The
French 2020 budget is off limits once again, but it is unlikely to be a problem
at a time when the economy needs a push. However, Mario Draghi insisted this
week that countries like France, with high debt levels, should keep some powder
dry
GERMANY
Germany's
Factory Recession Sends Industry Employment Plunging – BB
Export
decline eased, but inflation pressures remain weak * Euro unwinds earlier gains
as German numbers disappoint
The
end of the German-American affair – Politico
Once
firm friends and allies, the two old partners are drifting apart — and that’s
not just down to Trump.
Editorial:
Germany’s ‘Debt Brake’ Is an Unnecessary Drag – BB
Fiscal
discipline is good, but leaders in Berlin need more freedom to spur a slowing
economy.
EUROPEAN
CENTRAL BANK
Introductory
statement to the press conference (with Q&A) – ECB
ECB
Press Conference - 24 October 2019 – Youtube
Draghi
signals slowdown is spreading – ABN
AMRO
Setting
the scene for downward revisions and further stimulus
Draghi's
ECB Era Ends With Deja Vu of Trichet ‘Quantum Leap’ – BB
ECB
chief singles out common budget tool as key euro need * Such a measure
shouldn’t create moral hazard, Draghi says
ECB:
Arrivederci, Mario
– ING
With
masterly matter-of-factness. Mario Draghi leaves the ECB with his well-known
style... and a Prussian helmet
Thank
you, Draghi
– Danske
Bank
The
ECB meeting today will mostly be remembered for Draghi's last press conference
and not its monetary policy messages. With QE and tiering not effective yet,
there was little news to gauge. Draghi refrained from giving specificities on
tiering, but indicated that ISIN limits were self-imposed.
Draghi’s
last meeting - no regrets – Nordea
The
ECB kept rates on hold as expected at Draghi’s last meeting. The meeting was
short on forward guidance, but the ECB still see the need for highly
accommodative policy amid weak growth, muted underlying inflation and low
inflation expectations.
Arrivederci
e grazie, President Draghi – Nordea
We
use our machine learning tools to characterise Draghi relative to other
Executive Board members. President Lagarde will need to follow Draghi in
handling sensitive politics and get the Executive Board to adopt her policy
views over time.
ECB
Gives Draghi Warm Farewell After Weeks of Policy Quarrels – BB
Frederik
Ducrozet: Mario Draghi’s Greatest Hits – Twitter
Results
of the Q4 2019 ECB Survey of Professional Forecasters – ECB
ECB
Survey Shows Across-the-Board Cut in Inflation, GDP Outlook – BB
The
euro area bank lending survey Q3 2019 – ECB
Credit
standards eased slightly for loans to enterprises and loans to households for
house purchase, also supported by more favourable funding conditions. This was
in spite of a continued tightening contribution of risk perceptions related to
the economic outlook. Credit standards, instead, continued to tighten for
consumer credit.
Germany's
Peace Offering to the ECB – BB
Isabel
Schnabel's ability to see both sides of the monetary argument would make her a
first-rate addition to the central bank's executive board.
ECB’s
Wunsch Suggests Escape Clause If Stimulus Causes Damage – BB
Belgian
governor sees alternative ways to deal with QE limits * Wusch says favors
fixing inflation target at 2%, policy review
UNITED STATES
FEDERAL RESERVE
Federal
Reserve preview: More, more more… - ING
Analysts
are split on whether the Fed will cut rates for the third consecutive FOMC
meeting, but we are of the view the Fed will ease again. A decelerating economy
and falling inflation expectations will likely result in further rate cuts over
coming months
Divided
Fed is likely to cut again without pre-commitment – Danske
Bank
Still
no pre-commitment to more easing. We expect the Federal Reserve will cut rates
again by 25bp when it meets next week (
Fed
Preview: Matching the mid-90s – Nordea
The
Fed will most likely cut rates for a third consecutive time next week. A lot of
attention will be given to Powell’s wording of possible future rate cuts and
whether recent liquidity announcements are in fact QE or not.
Fed
Seen Cutting Rates Next Week and Then Hitting Pause Button – BB
Economists
in survey see one more rate decrease next year * Risk of more serious downturn
still hangs over U.S. outlook
Trump
Isn’t Putin’s Puppet. He’s Just Unfit for Office. – BB
Democrats
go too far when they say all roads lead to Russia with the president.
OTHER
Editorial:
The World Economy Is Stumbling Toward Disaster – BB
If
a new recession strikes, the Trump administration will get — and deserve — much
of the blame.
Why
US GDP is routinely understated – ING
Gross
Domestic Product is understated by 0.75% every year while inflation is
overstated by 0.4%. This is the conclusion of our major new report, in
collaboration with John Calverley of Calverley Economic Advisors, which argues
that a mis-measurement of the digital sector is distorting our view of the
world.
Charting
the Global Economy: Draghi’s Exit, Cautious Corporates – BB
Authers'
Newsletter: Following the Money Leads to a Grim Outlook – BB
Companies
in the U.S., Europe and Japan have used cash in radically different ways, but
there’s a troubling underlying theme.
Which
Is Scarier, Climate Change or CLOs? – BB
All
due respect to Greta Thunberg, but the corporate-debt time bomb looks like the
more imminent threat.
What
is priced in for the ECB and the Fed? – ABN
AMRO
ECB:
Markets largely expect status quo over coming quarters * FED: OIS forwards
suggest October cut a done deal, but question mark over December
How
to Tax Tech Monopolies – BB
A
19th-century proposal to prevent landlords from gaining excessive wealth could
have digital applications.
Global
debt flows: Sweet spot comfort for risk assets – ING
Latest
bond flows are consistent with more buying of risk, albeit at a slower pace.
Even where flows have slowed, total returns have not - local currency emerging
market outflows contrast with accelerated positive total returns. Inflows to US
bonds remain firm, with USD allocation now very elevated. Inflows to corporates
(incl high yield) remain firm too
Snus
Can Save People From Cigarettes. Just Ask Sweden. – BB
Swedish
men have the lowest rate of lung and oral cancer in Europe. And snus — while
certainly not risk-free — are about to get a big push in the U.S.