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from MacroScope:

Margin for error

A Union Flag and Scottish Saltire fly over Britain's Cabinet Office in central London

Another day, another Scottish opinion poll and this time a different message, but only slightly.

A Survation survey last night showed 53 percent of Scots would vote to remain in the UK, 47 for independence. Ten percent of the electorate remain undecided. That counters three recent polls which have shown a dead heat or slight lead for the Yes campaign. Given the margin for error – three points either way – they all suggest next Thursday’s vote is too close to call although hitherto, Survation has consistently put support for independence higher than other pollsters.

There is a chance that the dramatic narrowing of the polls – with one giving a lead for the Yes camp – has come too early for the nationalists as it makes all Scots realize that their votes count and concentrates minds. It is easy to vote for independence if you don’t think it’s going to happen and there is a week still to weigh up the consequences.

There is mounting evidence of the economic pain that could be inflicted north of the border. Lloyds Banking Group confirmed our recent scoop last night, saying it would set up legal entities in England i.e. relocate south. And Royal Bank of Scotland said it would base itself in London in the event of a Yes vote.
Scottish banks are increasingly concerned about worried customers looking to move funds out of the region because of fears over the impact of independence.

from MacroScope:

10 days to define the United Kingdom

The Flag of Scotland, the Saltire, blows in the wind near Berwick-upon-Tweed on the border between England and Scotland

The earthquake may be about to happen. Over the weekend the first opinion poll putting the independence campaign ahead landed with a resounding thump.

That prompted the UK government to rush forward to this week plans to spell out what further devolved powers Edinburgh would get if the Scots vote to stay on Sept. 18.

from Breakingviews:

Euro has further to fall

By Swaha Pattanaik

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Euro zone inflation is too low, and economic activity sluggish. But at least one thing is going the European Central Bank’s way. Its hankering for a weaker currency will be fully gratified.

from MacroScope:

Will the guns fall silent?

A Ukrainian serviceman smokes as he sits on an armoured vehicle near Kramatorsk

Ukrainian President Petro Poroshenko and the main pro-Russian rebel leader said they would both order ceasefires on Friday, provided that an agreement is signed on a new peace plan to end the five month war in Ukraine's east.

Talks are due to resume in the Belarussian capital Minsk. On Wednesday, following a string of aggressive statements in previous days, Vladimir Putin put forward a seven-point peace plan, which would end the fighting in Ukraine's east while leaving rebels in control of territory.

from Counterparties:

The easing that must not be named

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The European Central Bank has started the march toward quantitative easing. At today’s ECB press conference, president Mario Draghi announced that “the Eurosystem will purchase a broad portfolio of simple and transparent asset-backed securities (ABSs).” In the words of the WSJ’s Alen Mattich, Draghi “pulled out the long bow, notched the biggest monetary arrow he was allowed, gave a mighty pull and let fly...”

Technically, the news this morning was the surprise cut in interest rates, to 0.05 percent from 0.15 percent, but the fact that ABS purchases will begin in October was really what people got excited about. About those purchases: should they be considered QE, a policy that Draghi hinted that the ECB might finally be getting around to at a speech last month at Jackson Hole? It’s unclear. It really depends on how you define QE.

from MacroScope:

What’s it all about, Mario?

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It’s ECB day and after Mario Draghi’s recent dramatic utterances, expectation for fresh action has grown, expectations which are likely largely to be dashed.

Draghi told the world’s central banking elite in Jackson Hole last month that market inflation expectations were falling markedly and the European Central Bank would use everything in its power to stabilize them in order to avoid a deflationary spiral. He also ripped up central banking orthodoxy by calling for more fiscal spending by governments at the same time as redoubling economic reform efforts. How to read that?

from MacroScope:

Nearer the brink

A man walks past cutting boards, that have been painted with images of Russia's President Vladimir Putin, at a street store in the center of St. Petersburg

Ukraine is nearer the brink with Russian forces now pretty clearly operating over the border. The past week has seen Ukrainian forces flee in the path of a new rebel advance which Kiev and its western allies says has been directly aided by Moscow's forces.

Russian President Vladimir Putin called on Sunday for immediate talks on "statehood" for southern and eastern Ukraine, though his spokesman tried to temper those remarks, that following an aggressive public showing in which Putin compared the Kiev government to Nazis and warned the West not to "mess with us".

from Anatole Kaletsky:

What’s Europe’s best hope for avoiding a second euro crisis?

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This week’s theatrical resignation threat by Manuel Valls, the French prime minister, combined with deep European anxiety about deflation, suggest that the euro crisis may be coming back. But a crisis is often an opportunity, and this is the hope now beginning to excite markets in the eurozone.

Investors and business leaders are asking themselves three questions: Will European governments and the European Central Bank recognize the unexpected weakness of the eurozone economy as an opportunity to change course? If they do, will they know how to grasp it? And will they be allowed to do what is necessary by the true economic sovereign of Europe, German Chancellor Angela Merkel?

from Anatole Kaletsky:

Can central bankers succeed in getting global economy back on track?

Stanley Fischer, the former chief of the Bank of Israel, testifies before the Senate Banking Committee confirmation hearing on his nomination in Washington

Why is the world economy still so weak and can anything more be done to accelerate growth? Six years after the near-collapse of the global financial system and more than five years into one of the strongest bull markets in history, the answer still baffles policymakers, investors and business leaders.

This week brought another slew of disappointing figures from Europe and Japan, the weakest links in the world economy since the collapse of Lehman Brothers, despite the fact that the financial crisis originated in the United States. But even in the United States, Britain and China, where growth appeared to be accelerating before the summer, the latest statistics -- disappointing retail sales in the United States, the weakest wage figures on record in Britain and the biggest decline in credit in China since 2009 -- suggested that the recovery may be running out of steam.

from MacroScope:

Euro zone recovery snuffed out

A BMW logo is seen the wheel of a car in Mexico City

A glut of euro zone GDP data is landing confirming a markedly poor second quarter for the currency area.

The mighty German economy has shrunk by 0.2 percent on the quarter, undercutting the Bundesbank’s forecast of stagnation. Foreign trade and investment were notable weak spots and the signs are they may not improve soon.

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