European Economy

Nordea with the note.

Nordea with the note: There was broad support for the ECB to increase the pace of its bond purchases, but that support may wane, as the economic situation improves.

Via Societe Generale: After a tumultuous first year, it looks like president Lagarde’s ECB is gradually finding its feet and defining its new modus operandi.

Four and a half years after the vote, Britain is properly out of the European Union and moving into a new era.

Via Bartho: Within the past fortnight, China has taken two steps that undermine the ability of the incoming Biden administration to build a western alliance to contain China’s growing and increasingly aggressive global assertiveness.

Via FTAlphaville: As with Japan in the 1990s, years of low — and even negative — interest rates in the eurozone have led to suspicions that the region’s business landscape is harbouring a load of zombie firms.

Via News: With three words, Sweden’s King Carl Gustaf captured the panic engulfing his country as it backflips on a controversial herd immunity strategy and coronavirus case numbers explode.

Via MedRxiv: Abstract A variant of SARS-CoV-2 emerged in early summer 2020, presumably in Spain, and has since spread to multiple European countries.

Via the excellent Damien Boey at Credit Suisse: Temporary fiscal union forming. The European Commission (EC) is launching an unprecedented fiscal package of €750 billion (5.6% of GDP) to deal with the fallout of COVID-19.

Via Magellen: ‘il Boom’ is how Italians describe the ‘great transformation’ of Italy over the 1950s and 1960s when a poor country turned itself into a modern industrial powerhouse with a stable currency, the lira.

Via the FT: A closely watched gauge of stress in the eurozone’s financial system has climbed to its highest level since 2012, a sign that the coronavirus crisis has pushed up borrowing costs for banks in the currency bloc.

Via the BBC: The coronavirus pandemic has exposed deep divides in Europe, with EU member states arguing over how to tackle the economic fallout.

One of the components of MB’s ongoing COVID-19 base case, a second-round financial crisis, is a European banking bust.

Maybe.

Via FTAlphaville: In the first of what we imagine will be many targeted fiscal policies to alleviate the economic stress from the Coronavirus panic, news from quarantined Italy this Tuesday morning.

GaveKal on Brexit: Until last week there were so many permutations of Brexit that efforts to foresee events beyond the next political deadline were doomed to failure.

Via The Guardian: Universities are not adequately responding to the growing risk of China and other “autocracies” influencing academic freedom in the UK, the foreign affairs select committee has said.

Via Westpac: The October ECB meeting saw policy left unchanged.

Via UBS: Brexit crossroads: Possible paths ahead and their impacts on assets Things have been very fluid in the last 24 hours, but we believe markets still ascribe a low probability to a Brexit deal by end-October.

Via the BBC: Conservative MP Phillip Lee has defected to the Liberal Democrats ahead of a showdown between Boris Johnson and Tory rebels over Brexit.

Via Wolfgang Munchau: The gloves have come off on both sides.

Waleed Ali is clutching at his Brexit pearls today: This trick of rebuilding globalisation through lots of new bilateral agreements is really designed to preserve the mythology of national sovereignty: to say Britain will remain in the global economy, but on its own terms.

Via the excellent Damien Boey at Credit Suisse: Overnight, markets were spooked by deteriorating economic data and broad-based inversion of yield curves among the developed markets.

What a gale of fresh air is Adrian Blundell-Wignall, blowing aside Aussie group think with ease.