ECB's Comprehensive Assessment (updated)
W/E: Weekly Support (updated)
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EUROPE
For the ECB’s
stress test, see my updated special.
Optimizing
the Eurozone – Project
Syndicate
The
eurozone is facing a bleak economic outlook, with growth remaining stagnant and
the threat of deflation looming large. Its prospects will not improve unless
and until it becomes the “optimal currency area” that its creators believed it
to be.
Misrule
of the Few – Foreign
Affairs
How the
Oligarchs Ruined Greece
The case
for using public investment to boost growth in EZ is overwhelming – Europp
/ LSE
The focus
on balancing budgets and pursuing structural reforms has clearly failed to
revive Eurozone economies and a large public investment initiative offers the
most logical solution under the present circumstances.
Europe’s outgoing trade chief said the U.S. may break off talks on a commercial
accord in early 2015 unless Europeans show a firmer willingness to include
investment-protection provisions in any deal.
Euro
area: higher inflation in October despite oil price decline – Danske
Bank
BUDGETS
Are the
Eurozone’s fiscal rules dying? – Bruegel
The
European Commission and European Council have blinked.1 Reprimanding France and
Italy for their transgressions of the fiscal rules
was too risky. With face-saving measures, France and Italy will now break the eurozone’s
prized fiscal rules.2
Brussels clears France and Italy’s budgets – FT
The
European Commission on Tuesday decided not to send the French and Italian
budgets back to their governments for major revisions, after both agreed to
additional fiscal tightening that makes them closer to meeting EU targets.
GERMANY
If domestic
demand does not rise and compensate for the slowdown in world demand, the huge
excess of German savings over investment will drag the European economy into a
deflationary spiral. That is what standard economic analysis suggests, and that
is actually what happened in the 1930s and led to the economic and political
disasters of which we all know.
Despite
substantial gains in recent German regional elections, the Alternative for Germany may struggle to consolidate its
federal presence – Europp
/ LSE
Euro
Outflows at Record Pace as ECB Promotes Exodus – BB
Domestic
and foreign investors spurred 187.7 billion euros ($239 billion) of
fixed-income outflows from the euro area in the six months through August
Record
outflows from Europe-focused ETFs – FT
US investors’ retreat from Europe has accelerated this month, with
the amounts they have pulled from European-focused equity exchange traded funds
already exceeding the previous record set in August.
SWEDEN
Repo rate
cut to zero per cent – Riksbank
Monetaty
Policy Report, October 2014 – Riksbank
Monetary
Policy Report, October 2014; Slides – Riksbank
Numerical Excel
data – Riksbank
SEK FI
& FX Strategy: Welcome to the end of the line – Nordea
Riksbank
goes to zero, what’s next? – Nordea
Riksbank
Cuts Key Rate to Zero as Deflation Fight Deepens – BB
Riksbank
Rejects Calls for QE After Resorting to Zero Rate – BB
Sweden’s central bank cuts rates to zero –
FT
UNITED STATES
FEDERAL RESERVE
Fed
preview: softer tone on inflation but bar for QE4 is high – Danske
Bank
How
Effective Were Fed Bond Buys? A QE Research Bibliography – WSJ
MACRO NUMBERS
U.S. core capital goods orders post
largest fall in eight months – Reuters
U.S. business spending weakens despite
upbeat sentiment – Reuters
US durable
goods orders miss expectations in September – TradingFloor
Core Capex
Drops, Durables Goods Orders Slide, Miss By Most In 2014 – ZH
Durable
Goods Report for September: An Unexpected Contraction – dshort
U.S. home prices rise less than expected
in August: S&P/Case-Shiller – Reuters
National
House Price Index +5.1% y-o-y in August – Calculated
Risk
U.S. consumer confidence jumps in
October – Reuters
Consumer
Confidence reaches highest level for the cycle since 2007 – TradingFloor
Here Is The
Reason For The Surge In Consumer Confidence – ZH
The
Stunning Difference Between "Income Expectations" And Reality – ZH
OTHER
Fed
starting a meeting Tuesday and due to announce its policy decision Wednesday.
In general, there is a sense of relief that the most-recent array of economic
data and financial information isn’t showing more of severe deterioration in
the global economy. But having said that, all investors need to look at the
instructive case of Sweden, whose central bank cut rates to
zero Tuesday. It is a poster child for the damaging effects of global
disinflation.
Hilsenrath’s
Take: Fed Stays on Course * Fed Touchy About Touching Rate Guidance * ECB
Stress-Test Results Have Isolated Errors, Inconsistencies * Sweden Cuts Main
Interest Rate to Zero to Boost Inflation * Brazil Likely To Hold Rates Steady
Amid High Inflation and Weak Growth
Dollar
Dithers as QE Withers
– Marc
to Market
Great
Graphic: Slowing of World Trade Growth and Globalization – Marc
to Market
FINNISH
Deflaatio – kukaan ei taaskaan nähnyt mitään – Henri
Myllyniemi / US
Economist: Euroalueen deflaatio kurittaa kriisimaita
ankarasti – PS
Kateissa: markkinatalous – Hannu
Visti
Yale-professorin terveiset: karsikaa euroaluetta – PS
Osakeasuntojen hinnat laskivat kolmannella
vuosineljänneksellä – Tilastokeskus
Nyt asuntohinnat laskevat myös pääkaupunkiseudulla – Verkkouutiset