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from MacroScope:

Swedish shift

Opposition leader Stefan Lofven speaks at the election night party of the Social Democrats in Stockholm

Sweden's centre-left Social Democrats topped the poll in Sunday’s election but fell well short of an overall majority to the extent that it will struggle to form a strong coalition.

The Social Democrats and the Greens and hard Left, who would be natural coalition allies, garnered 43.7 percent of the vote. The anti-immigrant far right emerged as the third biggest party to hold the balance of power with nearly 13 percent.

It looks like there will be plenty of time for market jitters before a government is formed.
What looks more certain is the ousting of the centre-right means years of falling taxes and liberal economic reforms may come to a juddering halt.

A flurry of polls over the weekend didn’t materially change the Scotland independence story.
The poll of polls – which because it collates a far higher number of votes than an individual survey should have a smaller margin for error than the 2 or 3 percentage points in any single survey – puts the pro-union vote on 51 percent, the independents on 49, still too close to call.

from MacroScope:

All to play for

A "No" campaign poster is seen in a field after being vandalised by a "Yes" supporter on the outskirts of Edinburgh

The latest Scottish opinion poll puts the unionist camp ahead by 52 points to 48 – still way too close to call given the statistical margin for error.

The last two polls have given the “No” campaign clinging to a narrow lead following a dramatic narrowing of the gap and one survey giving the separatists a lead. So has the “Yes” momentum stalled? If you chart the numbers over the past two weeks you might think so but if you did so over the past two months you would say emphatically not.

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.

from MacroScope:

An almighty gamble

Britain's Prime Minister David Cameron leaves Downing Street in London

Having woken up to the very real possibility of Scotland going it alone, the leaders of Britain’s main parties have scrapped their parliamentary business and headed north to campaign in what amounts to a huge gamble.

The “No” campaign has been criticized for many things – being too negative (though no is negative by definition), being too aloof, failing to address the hole’s in Alex Salmond’s manifesto. The question is whether it is too late to do anything about it. It is risky to deploy Prime Minister David Cameron who, by his own admission, is not catnip to the Scots.

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 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 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 John Lloyd:

Germany’s renewed hegemony isn’t something Europe needs to fear

German Chancellor Merkel attends news conference in Berlin

She can’t help it. Angela Merkel, chancellor of Germany, is the most important leader in Europe. She tries to duck it by exhibiting a modest demeanor, presenting no charisma, no grand pronouncements, no apparent ambition to stamp her views on history. She just carries on.

Yet European leaders vie for her Mona Lisa smile (or is it a smile?). Are we comfortable with Merkel’s influence and power?

from Breakingviews:

German yield curve is the safest one to play

By Swaha Pattanaik

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

 Bull flattening may sound like an exotic, and rather cruel, sport, but for today’s bond investor, it describes an investment opportunity. Some juicy bear flattening is also available, although it comes with somewhat more risk.

from Breakingviews:

Holiday email embargo a must-have, not an opt-in

By George Hay

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

Daimler wants to stop email ruining the holidays of its 275,000 employees. So the German carmaker is giving them the right to have all messages received during vacation automatically re-routed, with the sender warned to try again later. In this case, choice may not be the best policy.

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