Friday, October 23, 2015

Economic News , Data & Views ( October 23 , 2015 ) - Spain In Focus ( Political scrimmage between Catalan leadership / Parliament and Rajoy on display as independence march begins in earnest ) .....Poland Updates ( Will Poland's Justice & Law Party win on Sunday - what does this mean for Europe ? ) .......Portugal Post - Election Crisis - No Confidence vote looms ....... Refugee Crisis ( Sunday's Special Summit on Migratory Flows of Refugees is headline item - list of participants , Assad and Putin meet to discuss strategy on Syria War - which has an impact on refugee flows , Tsipras bows once again to Merkel / Orban dismisses her nonsense ) ..... Greece Friday Updates ( Political - domestic and International , Economic items , Troika - now the Quadriga items of note for Greece ) ..... Data Splash ( German and France report PMI numbers for October - Germany disappoints , france better than expected , EZ Composite PMI Data reported for October , Inflation Outlook data reported - 2015 / 2016 & 2017 ) ...... Odds & Ends

Overview For The Day.....

A great overview for the day !

EURUSD 300 pips lower since Draghi jawboning

Yield curve negative through six years...can the ten year bund also go negative ?

Germany to say " Nein " on EU Deposit Insurance ?

ECB to extend QE by €500B through end-2017, comprising increase in purchased to €60B/month to March 2017 then tapering - Goldman


Spain ....

Ara article says Catalan parliament would likely debate and vote on "solemn" breakaway declaration during first week of November.

Right-wing minority party Vox has already sent out a statement demanding Rajoy now suspend home rule in Catalonia:

The breakaway declaration—before Mas is appointed First Minister—would be the start of the road towards an "independent Catalan republic".

Poland .....

Here’s Why Poland’s Election Might Shake Up Europe

as both and prepares for elections on Sunday, clouds over their relations writes

Polls indicate Poland’s Law and Justice Party is poised to win Sunday’s elections:

has benefited hugely from EU membership. It's now turning Eurosceptic


NEW BLOG POST - Uncertainty ahead in as Socialist Party looks set to vote down centre-right minority gov't

Portugal Socialists vow to topple government with no-confidence vote

Interesting stuff from . Socialists set to vote down Passos Coelho's minority gov't. It means he'd have to make way for another PM.

Refugee Crisis ......

Germany toughens up asylum rules as migrants stream in

Austria calls for "Fortress Europe "

And note Slovenia is mulling the building of it's own border fence...

Germany to push for compulsory EU quotas to tackle refugee crisis

Greece sees record 48,000 migrant, refugee arrivals in past five days: IOM

Refugee flows to surge, U.N. says Russian airstrikes not to blame

Ankara, still blurry, now agrees to name Bashar al-Assad ‘honorary president’ for six months

supported by airpower continues its offensive against militants

Putin says Syria's Assad is open to working with some rebels:

hails Germany's refugee policy

List of confirmed participants for Leaders mtng on migratory flows ~

Juncker urges EU member states to respect migrant aid pledges

Orbán stares down Merkel on migration — calls Europe "rich and weak".

Takeaway - Merkel to seek refugees brought directly from Middle East to control numbers and avoid perilous journeys


Negotiations dragging on regarding bank recap and Gov't stakes

Greece has to move quickly and make some tough decisions for those bailout fund dollops.

British Government Rejects Military Base in Cyprus As a New Migrant Path

'Quadriga' team of creditors' inspectors leave Athens after three days of inconclusive talks. €2bn tranche payment to looks unlikely


Who are these “armed, masked men in uniforms attacking migrant boats off Greece”?


Tsipras attacks creditors' demands for conclusion of 1st review. "We can't accept neoliberal demands that will tear social cohesion"

: I propose for Europe to develop new political agenda

: France is prepared to assist Greece to make good use of state assets

Foreclosures becoming a major issue in re negotiations with the Quadriga. Back in crisis mode. (I know, you missed it)

: We will implement all our pledges by end of November

: If Greece meets pledges, debt restructuring negotiations will follow

Good piece w detail/background on Greek govs dismissal of top tax official as concerns grow about political meddling

Greek media strike over TV license overhaul

Cabinet dismisses revenues chief as bill seeks to increase oversight

Q2 household disposable income -1.6% YoY, final consumption +1.3% YoY.

Q2 gg debt confirmed by Eurostat at €300.06 bln corresponding to 167.8% of GDP.

Remember the Greek market shutdown? Stocks are moving on

Quadriga sees high cost cutting potential in banks, also incl payroll costs (via )

Final meeting between Fin & Econ Mins with quadriga mission chiefs at 1pm (via )

Draft bill on bank recap to be tabled for public consultation early next week & voted by Oct 30 (via )

Friday Data.....

Latest data suggests that further slowdown in production growth is likely

Mfg at 5-month low of 51.6: "Today’s numbers signal a note of caution for German manufacturers."

Flash Composite Output Index at 54.5 in Oct (54.1 in Sep), Services at 55.2, Manufacturing at 51.6

Eurozone Oct composite PMI 54.0, beating 53.4 consensus

ECB professional forecasters lower inflation outlook to 0.1% 2015, 1.0% 2016 and 1.5% 2017; vs Q3 forecasts of 0.2%, 1.3% and 1.6%

October purchasing manger surveys suggest Eurozone growth likely to be steady at 0.4% in fourth quarter.

Output growth in quickest in 4 month in October. Composite Output at 52.3, Services 52.3, Mfg at 50.7

France Oct Mfg PMI 50.7 vs 50.2 consensus; 50.6 Sep France Oct Service PMI 52.3 vs 51.7 consensus; 51.9 Sep

Climb in France Oct services PMI to 4-month high of 52.3 follows Insee report that Oct services sentiment index reached 4-year high of 100

Portugal president names incumbent Passos Coelho prime minster. Socialists and leftist allies say new center-right govt will be short-lived.

Citi on : At the very minimum we will see a move to $1.0800. This is building into a perfect storm of EUR making a new low by year end.

Citi: As we sprint through final straight of 2015, looks like year is going to belong to the ECB's Draghi, and not to the dilly dallying Fed

Chart of the day: 1y1y Eonia fwd rate dropped during ECB presser showing that mkts prices in a 10bp rate cut by >50%

MS: ECB has made it clear that it wants lower EUR, we will not fight it as prospects of more QE & lower depo rate suggests higher cap flight

RBS expects QE extension (by 6mths) & acceleration (to €90bn/mth) in Dec. In addition, now believes to cut deposit rate to -0.30%.