#Dombrovskis said (kudos to Open Europe)The next Commission will be committed to bringing € agreements into EU framework, means treaty changeIf EU states demanded a mechanism for country to leave € COM would provide tech support. Refuses to say personal viewPointed out earlier flaws in the EMU structure, yet when questioned on it he rejected euro as cause of crisisEuro has been a huge success despite crisis, even countries outside the euro had crises so I think euro is not the problemPoints out that his country went through a deep crisis without the euro - (does not mention his currency was pegged to euro)
Previously
on MoreLiver’s:
Follow ‘MoreLiver’ on Twitter
EUROPE
Behold
the Euroglut – FT
Deutsche
Bank’s Saravelos argues that Europe’s huge excess savings combined with aggressive
ECB easing will lead to some of the largest capital outflows in the history of
financial markets.
Ambrose
Evans-Pritchard: ECB's treatment of Ireland and Italy is a constitutional scandal, yet
nobody held to account
Cameron's
fiscal bribery – Frances Coppola
/ Pieria
David
Cameron's speech at the Conservative Party conference has generated approving
comments across the media…The heart of his speech was a double tax cut promise.
But it's a conditional promise. These tax cuts will only take effect after the
deficit has been eliminated. But eliminating the deficit completely in two
years under the shadow of war without trashing the economy would be an
extraordinary feat, requiring sacrifices not only from “hard-working people”
but from the businesses that employ them. Does anyone really think this is at
all realistic?
Blinded
EU can learn from one-eyed US – FT
If you
listen to German officials, their philosophy is hard to distinguish from Tea
Party Republicans
Eurozone
Asymmetries – mainly
macro
Your
reaction to this little imaginary story is that it couldn’t possibly happen
because other Eurozone countries would not permit it to happen… And in this
real world story I too wonder why other Eurozone countries allow Germany to get away with it.
How is
my region doing within the European Union? – Eurostat
The
regional yearbook 2014 provides an overview of European regional statistics
covering a wide range of fields. It thus gives a more detailed picture than
national level data and helps in understanding the regional diversity that
exists in the EU.
EUR
rates: A liquidity roadmap revisited – Nordea
Liquidity
remains at the forefront of what’s up and down on EUR rates. With the ECB last
week internalized we update our liquidity roadmap for Eurozone. We highlighted
downside risks last time, and we do so again. The ECB is the reason as last
Thursday was a relatively hawkish one with e.g. an elaborate dismissal of a
firm balance sheet target being a goal in itself. The market has been revised
up in terms of implied rates, and is having a hard time nailing the Eonia
fixing correctly.
BUDGET DEFICITS
How to
Bring Italy and France’s Budgets in Line With EU Deficit
Rules Will Be Immediate Challenge
The EU must
change policy to avert the threat of prolonged low growth and low inflation,
including easing the tempo of deficit reduction, according to France’s finance minister.
The Bond
Market Trumps Brussels On France’s Deficit – WSJ
However
much Brussels snipes about fiscal self-restraint, the French
government is likely to try to muddle along unless forced to take measures by
the bond market.
Greek
budget promises higher growth, tax cuts – Reuters
Greek
Budget Leaves Creditors Unconvinced on Exit – BB
Greece’s creditors insist the country
should retain access to bailout funds next year even as the government seeks an
almost-balanced budget for the first time in decades, two officials with
knowledge of the matter said.
EUROPEAN CENTRAL BANK
Private
sector QE can work in the euro area – FT
Gavyn
Davies: The ECB’s own brand of QE, taken together with the Asset Quality Review
due to be announced in October, is intended as a rifle shot, aimed directly at
the defective banking system. Although a very long time in coming, it may
eventually prove more successful than copying the blunderbuss approach adopted
in other countries.
Will EU
Bank Asset Quality Review Boost Transparency, Investor Confidence? – CFA
Institute
The
"Disappointing" Impact Of Euro Devaluation On European GDP – ZH
Natixis: 10%
depreciation of the euro increases the euro zone’s level of GDP by only 0.2 percentage
point…We see no link between the relative growth of the euro zone and the euro’s
exchange rate.
Wolfgang
Münchau: A euro devaluation would have to be extreme to have a big impact on,
say, Italian exporters
MACRO NUMBERS
Euro zone
sentiment falls in Oct to lowest level since May 2013 – Reuters
German
industry orders plunge by largest amount since 2009 – Reuters
German
Factory Orders Slump Most Since 2009 – BB
UNITED STATES
Is There
a Wage Growth Puzzle?
– Tim
Duy’s Fed Watch
Be cautious
in assuming that this time is different. The unemployment and wage growth
dynamics to date are actually very similar to what we have seen in the past.
Low wage growth to date is not the "smoking gun" of proof of the
importance of underemployment measures. There very well may have been much more
labor market healing that many are willing to accept, even many FOMC members.
The implications for monetary policy are straightforward - it suggests the risk
leans toward tighter than anticipated policy.
US
midterm elections offer limited prospect for economic change – FT
Mohamed El-Erian:
Investment in real economy must come from private sector
USD: Quantitative
Tightening and the drop in inflation expectations – Nordea
The Fed’s
favourite measure of inflation expectations are now at levels where it normally
starts QE programmes, not stops them. Most markets seem to be trading in line
with the Quantitative Tightening (QT) theme, in which inflation premiums are
being reduced in various markets. Unless the Fed is seen changing its goal
posts, a strong labour market developments will keep the Fed on its exit track,
underpinning the USD. QT is the gift that keeps on giving.
ASIA
As China’s economy starts to slow, following
decades of spectacular growth, the government will increasingly be exposed to
the siren song of capital-account liberalization. It should not allow itself to
be tempted from its tried and tested course by calls for a policy that has led
too many emerging economies onto the rocks.
Fears rise
over end game for pro-democracy protests as rhetoric escalates on both sides
Sliding
Australian dollar creates cross-rate opportunities – TradingFloor
Little
chance of respite for the sliding Australian dollar * The RBA thinks the
currency is above its "fundamental value" * The Reserve Bank of New Zealand is taking steps to bring down the
high NZ dollar
OTHER
Guide to
the Markets 4Q2014 – JPM
Dollar
strength and inflation expectations – Sober
Look
Country
Risk Quarterly Report
– BBVA
Bond
investing isn’t about forecasting – Medium
Monetary
policy: An unconventional tool – FT
Martin Wolf:
The Fed’s quantitative easing raises questions about whether it has worked and
its legacy
Emerging
markets election wrap-up – Danske
Bank
Brazil: Silva disappoints - Rousseff set
for re-election * Latvia: pro-EU governing coalition likely
to stay in power * Bulgaria: centre-right set to return to
power but with a fragile coalition
Why
public investment really is a free lunch – FT
Lawrence Summers: The IMF finds that a dollar of
spending increases output by nearly $3
September
Sentiment Summary –
Short Side
of Long
DAILIES
Daily
Central Banks – WSJ
Hilsenrath’s
Take: Pressure to Devalue Builds as Finance Officials Meet * Jobs Report Keeps
Early Fed Rate Hike On Table * Bernanke, Paulson and Geithner Face Grilling
Over AIG Bailout * Bank of England Plans Additional Protection for Depositors *
South Africa’s President Appoints New Central Bank Chief
Daily
Macro – WSJ
European
and Asian share markets were solidly higher despite another poor showing from
German industrial data and concerns that the European Union is poised to reject
France’s deficit-based budget. The motivator here is
the fact that investors in New York on Friday took a very positive
reading of that day’s U.S. jobs report, which showed continued
improvement in the labor market.
FI
Eye-Opener: Search for inflation not yielding results yet – Nordea
Bond yields
rise, but only modestly. Eonia overnight rate sinks to new record-lows. Yields
with more upside today. US payrolls strong – still no wage growth. French
disobedience not going unnoticed. Focus remains on central banks – Q3 corporate
earnings season starting. German, Austrian and US supply.
Dollar
Corrects a Bit – Marc to
Market
WEEKLIES
The
Investment Climate and the Week Ahead – Marc
to Market
The
previous week seemed to be a mirror as we once again saw credit tighten for the
week, equities continue to bleed and the US dollar go from strength to strength
– looks like our defensive feeling and thoughts played out.
What
Matters for Global Markets in the Week Ahead – WSJ
Emerging
Markets: Week Ahead Preview – Marc
to Market
Global
Central Banks Weekly Calendar – WSJ
Strategy:
On the radar – Nordea
Key views
& trades: flirting with €-QE * Asset allocation: “all trades are identical”
syndrome fading * EUR inflation: inflation markets not buying the FX relief
story * FX: the surprising SEK strength * Riksbank: FX intervention more likely
than QE * SEK rate vol: possible to sell SEK payers above UFR in ZC strategies
* Regulation: new SNDO guidelines marginally linker positive * Bond indices: major
changes towards year-end
FINNISH
Kansantaloudellinen aikakauskirja 3/2014 – Taloustieteellinen
yhdistys
Kirjoituksia mm. osuus- ja säästöpankkien suorituskyvystä ja
menestyksestä viime vuosina, innovaatiopolitiikan haasteista ja pankkikriisien
ennakoinnista, sekä katsauksen 1980-luvun jälkipuoliskon talouskehitykseen.
EKP:n toimien kustannus pieni – Roger
Wessman
EKP on jälleen kasvattamassa pitkäaikaisia
rahoitusoperaatioitaan antamalla pankeille eri kanavia pitkin halpaa
rahoitusta. Tämä herättää kysymyksen mitä halpojen luottojen antaminen maksaa
keskuspankkijärjestelmälle ja siten euroalueen kansalaisille keskuspankkien
viimekätisenä omistajina. Vaikka operaatioiden koko on valtava, kustannukset
jäävät todennäköisesti pieniksi. Ainakin alustavasti operaatiot ovat itse
asiassa keskuspankille liiketoiminnallisestikin kannattavia, kuten aikaisemmat
operaatiot ovat olleet.
4000 vuotta erehdyksiä ei riitä – EKP yrittää vielä –
Jan
Hurri / TalSa
Viisas oppii erehdyksistä mutta hölmö luulee tulosten
muuttuvan samaa yritystä ja erehdystä toistamalla. Viisas ottaisi jo 4 000 vuoden
erehdyksistä onkeensa ja uskoisi, että hintojen säännöstely on onnetonta
talouspolitiikkaa. EKP ei tätä usko, vaan yrittää entistäkin päättäväisemmin.
Hongkong ei hetkauta kiinalaisia – TalSa
Hongkongin suurmielenosoitukset saavat valtavaa
uutishuomiota länsimaisessa mediassa. Kiinassa asia ei näytä kiinnostavan ketään.
Viikkokatsaus: Hiljainen viikko (haukotus) – Nordea
Tulevaa: Fed: Kokouspöytäkirjat * Suomi: Teollisuuden suunta
ei muutu * BoE: Ei uutta Mennyttä: Yhdysvallat: Työmarkkinat paransivat * EKP
ei kertonut tarpeeksi uutta * Euroalue: Inflaatio hidastui lisää * Suomi: Velka
nousi Q2:lla