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EUROPE
Juncker’s
new Commission is the most ‘politicised’ in the institution’s history – Europp
/ LSE
In line
with the growing politicisation of the institution over recent decades, the 28
members include a record share of former prime ministers and deputy prime
ministers. The percentage of Commissioners who have a partisan affiliation with
their country’s current government, and the percentage who have previously
gained ministerial experience in national politics, are also at record levels
in comparison to previous Commissions.
Eurostat
made Austria add 29 billion euros ($36 billion) to its debt
ledgers, making it the region’s biggest loser of tightened data rules, with an
adjustment topping the one slapped on Greece’s wayward bookkeepers in 2010
Polish
QE? – FT
Guest
post: The Riksbank at zero — lessons for others – FT
Sweden’s Riksbank cut its key interest
rate to zero last week because inflation was too low. The Riksbank has been
noted – and criticised – for raising rates in 2011 to tackle a credit and
housing bubble. Peter Doyle, an economist and former mission chief for Sweden for the IMF, argues that the recent
experience of the world’s oldest central bank has more to teach policymakers.
IMF chief
Christine Lagarde named Poul Thomsen, architect of the controversial Greek
bailout and one the fund’s top crisis-fighters, to lead its European Department
on Monday.
GERMANY
German
austerity is not only damaging the Eurozone, but is also starving the country
of its own much needed investment – Europp
/ LSE
A common
argument in the context of the Eurozone’s economic problems is that Germany should pursue a more expansive
fiscal policy to help generate growth in the rest of the single currency area.
Bob Hancké writes, however, that while such a strategy might be justified in
terms of its wider effects across Europe, the German economy itself is also struggling
from the pressures of restrictive spending policies. He argues that unless the
country increases public investment there is a very real chance of Germany developing into a dysfunctional
economy, with the only hope for growth residing in exports and citizens
struggling with both low wage growth and spiralling income inequality.
Stephen
Pope: Germany can no longer boast efficient infrastructure *
Government's obsession with 'Black Zero' threatens to lag economy * By 2040 the
population will be lopsided toward retirees
German
manufacturing PMI picked up in October, but there are many present and future
problems threatening the country's Wirtschaftswunder, or 'economic miracle',
says Stephen Pope.
UK, GERMANY, MIGRATION
European
Harmony? Merkel Hands Cameron an Ultimatum and for First Time Ever Sees Britain’s Exit from the EU – Wolf
Street
The German
government draws a line. If Britain steps over it, it doesn't belong in
the EU. And it's not about money.
Chancellor
Angela Merkel has reportedly warned David Cameron she would rather see the UK leave the EU than compromise over
the principle of free movement.
EU
migrants should not be entitled to access national welfare systems for first
three years – Open Europe
EUROPEAN
CENTRAL BANK
ECB
Skips Fireworks for Day One of New Role as Supervisor – BB
Pulling
the eurozone back from the brink – Bruegel
Whatever
its flaws, OMT is the closest thing to a safety net the eurozone has
http://www.bruegel.org/nc/blog/detail/article/1471-pulling-the-eurozone-back-from-the-brink/
Should
the ECB care about inflation differentials? – Bruegel
It is
crucial to keep the average inflation rate close to two percent so that
inflation differentials are possible without deflation in some parts of the
euro area, which in turn might endanger area-wide financial stability and price
stability.
Fed heads
one way, BoJ the other. What now for ECB? – Reuters
The ECB
should stop fearing the Germans – The
Economist
We are
hosting a round-table discussion on what the European Central Bank can do to stave
off deflation and boost growth in the euro zone. First up is Paul de Grauwe of
the London School of Economics.
The
Draghi Put on Trial
– Project
Syndicate
The
European Court of Justice will rule soon on the legality of the European
Central Bank's "outright monetary transactions" scheme to finance
crisis-stricken eurozone countries. But, instead of asking whether the ECB’s mandate
allows it to act as lender of last resort, EU leaders should be making the case
for why it should.
Draghi
Stress Tested as BOJ-Riksbank Moves Pressure ECB – BB
The extra
easing now leaves Draghi under pressure to intensify his own response to weak
inflation or surrender in a renewed global currency war that has policy makers
looking to jolt consumer prices by embracing weaker exchange rates.
Sources:
ECB to keep TLTRO terms unchanged unless economic picture darkens – Reuters
Guide to
banking supervision
– ECB
SSM
Quarterly Report – ECB
Progress in
the operational implementation of the Single Supervisory Mechanism Regulation
Speech Danièle
Nouy – ECB
Hearing at
the Committee on Economic and Monetary Affairs of the European Parliament
MACRO NUMBERS
Markit
Eurozone Manufacturing PMI – Markit
U.K. Factory Growth Unexpectedly
Accelerates – BB
UNITED STATES
Slack in
the American labor market is being absorbed quickly, but the actual size of the
gap remains an open question. While most FOMC participants consider that the
decline in the unemployment rate overstates the improvement in labor market
conditions, the FOMC chose this week to no longer characterize the degree of
labor underutilization as “significant”.
ISM
Manufacturing index increases to 59.0 in October – Calculated
Risk
ISM Surges
To 3 Year Highs; Ignores PMI, Construction Spending Plunge – ZH
ISM:
Continued Expansion – dshort
ISM
surprises to the upside in October – TradingFloor
U.S. factory activity accelerates;
construction spending weak – Reuters
Very robust
ISM report – Danske
Bank
ISM
Manufacturing Report Stronger Than Expected – Bespoke
US: Manufacturing
firing on all cylinders – Nordea
Construction
Spending decreased 0.4% in September – Calculated
Risk
ASIA
Market
reaction to Japan’s latest QE – ZH
Japanese
Stocks Up 1600 Points, USDJPY Up 5 Handles Since QE Ended; Kuroda Opposition
Grows
Kuroda’s
Stimulus Turns Focus Back to Abe’s Third Arrow – BB
Why the
yen run will end in tears – TradingFloor
Bank of
Japan's actions will push USDJPY to new heights * Japanese opposition to
monetary largesse is growing * When the JPY train reverses, it could be quick
and brutal
China - slower export growth adds to
downward pressure on PMIs – Danske
Bank
Asia Factory Conditions Worsen – WSJ
China Oct
PMIs point to cooling economic momentum, growth target at risk – Reuters
China Services Gauge Joins Manufacturing
in Slowing Down – BB
OTHER
Daily
Central Banks – WSJ
Hilsenrath’s
Take: On Elections, the Fed and Policy Rules * Fed’s Kocherlakota: Dissent
Driven by Persistent Inflation Weakness * Fed’s Lacker Says Inflation Is Low
and Not a Problem * European Central Bank’s Bond Conundrum * Split Vote Shows
BOJ’s Kuroda Walking on Tightrope
Daily
Macro – WSJ
In Asia, weak PMIs in China and South Korea raise the risk that their central
banks will respond to the Bank of Japan’s surprise move Friday to increase its
asset purchase program, which weakened the yen, with tit-for-tat measures to
weaken their own currencies. The risk of an Asian currency war looms. On the
better news side, European PMIs were mostly higher, suggesting that the
deflationary spiral in the eurozone could be easing up, helped by a weaker
euro.
US yields
rise on the back of booming equities and rising wage pressures. Intra-Euro-area
spreads with clear narrowing. S&P 500 hits new closing highs. US wage
pressures finally building. Spanish political landscape looking increasingly
uncertain. Rebound in Euro-area inflation overshadowed by the drop in core.
Another big week: US elections, ECB, payrolls… Austrian, German, Spanish &
French supply.
Global FX Strategy - BOJ untapered
the Fed taper – Nordea
Volatility
came back with a vengeance in October as global markets were wrong-footed on
the back of disinflation and QE hangover worries. Overall, we expect volatility
to be back for good. For Emerging Markets however, the coming month promises to
be less eventful than the month that just passed.
World
Week Ahead – WSJ
Economies Going Separate Ways
Macro
Digest: Simple views from a simple man – TradingFloor
Steen
Jakobsen: China growth heading south, could hit 5%
* German/Eurozone recession is certain * Volatility to rise, govt. bond yields
to fall
Beware
of Repaying Sovereign Debt! – Klaus
Kastner
http://klauskastner.blogspot.fi/2014/11/beware-of-repaying-sovereign-debt.html
Celebrity
Central Bankers – Project
Syndicate
Kenneth
Rogoff: Many academics find it puzzling that central bankers’ speeches and
statements generate so much fanfare.
Riksbank:
flat-lined for many quarters * SEK rates: Swedish govies in a cross-market
perspective * Sweden macro: a repeat of 1999? * FX vol:
front-end rate convergence an anchor for FX vol * ECB: light is shed on the
December TLTRO * EUR macro: is Italy the elephant in the room? * Central
banks: what´s priced in?
FINNISH
Vaarana "tuhoisa tie" – eläkeyhtiön
toimitusjohtaja uskoo silti Suomen voittoon – Verkkouutiset
Eläkevakuutusyhtiö Varman toimitusjohtaja Risto Murto
tuskailee poliitikkojen päätöksentekokykyä, mutta luottaa suomalaisten
valmiuteen ottaa vastaan vaikeita päätöksiä.