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from MacroScope:

Euro falling but no impact on inflation yet

Lithuanian 1 euro coins are pictured in the Lithuanian Mint in Vilnius

Euro zone inflation figures are due and after Germany’s rate held steady at 0.8 percent the figure for the currency bloc as a whole could marginally exceed forecasts and hold at 0.4 percent.

One upside for the currency bloc is the falling euro which has broken below its 2013 lows and is down almost nine percent from the peak it hit against the dollar in May. With U.S. money printing about to end next month and speculation intensifying about the timing of a first interest rate rise from Washington, there are good reasons to think that this trend could continue.

If it does, it would push the prices of imports up while making it easier for euro zone countries to sell abroad which should have an upward impact on both growth and inflation. The impact won’t be instant, however, as today’s figures will demonstrate.

Either way, there is no chance of the European Central Bank doing anything new at its monthly meeting on Thursday having pushed through a range of new measures last time.

from Breakingviews:

Commodity bear market looks entrenched

By Swaha Pattanaik

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

The commodities bear market looks entrenched. Strong supply-side responses, or successful economic stimulus by the European Central Bank, would be required to reverse price falls. Neither looks terribly likely.

from MacroScope:

After “get in the hole!”, Europe remains in a hole

Team Europe golfers pour champagne over captain Paul McGinley as they celebrate retaining the Ryder Cup at Gleneagles

Who says Europe is broken? The Ryder Cup stays here again and even Nigel Farage, leader of Britain’s anti-EU party, said he wanted Europe’s golfers to win.

The euro zone is not winning the economic competition however, despite the European Central Bank’s best efforts (it should be noted that only 3 of the 12 Ryder Cup team come from euro zone countries).

from MacroScope:

A Fed dove does Broadway

Earlier this month, the chief of the Minneapolis Fed gave an extraordinary speech http://bit.ly/1qUTucn in which he called for higher inflation.

That's right -- you and me, paying more for goods and services. Why would a central banker want something like that?

from Ann Saphir:

Fed’s Kocherlakota does Broadway

Earlier this month, the chief of the Minneapolis Fed gave an extraordinary speech http://bit.ly/1qUTucn in which he called for higher inflation.

That's right -- you and me, paying more for goods and services. Why would a central banker want something like that?

from Ann Saphir:

A Fed dove does Broadway

Earlier this month, the chief of the Minneapolis Fed gave an extraordinary speech http://bit.ly/1qUTucn in which he called for higher inflation.

That's right -- you and me, paying more for goods and services. Why would a central banker want something like that?

from Counterparties:

MORNING BID – European Deflation

Never say the Europeans aren’t cautious. The dollar has been on a roll of late, in part because of the market’s growing expectation for more stimulus from the European Central Bank before long that would include some kind of larger-scale quantitative easing program after a speech last week from Mario Draghi that European markets seem to still be reacting to several days later. Reuters, however, reported that the ECB isn’t quite likely to do move quite so fast (heard this one before) and that took some of the wind out of the dollar’s sails and boosted the euro a bit.

Some of the move in the euro will depend on the trend in European yields, where everything is going down – German Bunds continue to make their way rapidly toward zero, and Bund futures remain in an overwhelming bullish trend, per data from Bank of America-Merrill Lynch. Analysts there also anticipate the dollar is going to experience some kind of medium-term correction – but remains in rally mode otherwise. There’s a headwind there for equities from that – rising greenback makes U.S. goods more expensive, but the gains are still only in earlier stages, and haven’t pushed into territory that would otherwise indicate surprising strength that we haven’t seen in some time.

from Breakingviews:

ECB deserves to lose market’s inflation confidence

By Swaha Pattanaik

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

The case of the euro zone’s vanishing inflation rate has so far stumped European Central Bank President Mario Draghi. Quite rightly, investors’ faith in his ability to do anything about the problem is also evaporating.

from Expert Zone:

India Markets Weekahead: ‎Tough for the Nifty to break out of its range

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The Nifty continued its upward trajectory to close at a two-week high of 7,792 in a holiday-truncated week. However, this optimism was not reflected in the broader market, especially the mid caps and small caps.

Among the sectors, public sector banks, realty, infrastructure and capital goods, which led the rally earlier, have underperformed in the last few weeks whereas defensives such as FMCG, pharma and IT stood out, an irony when markets are close to a record high.

from Global Markets Forum Dashboard:

A very German problem for the ECB

The clock is ticking down to the European Central Bank’s policy meeting tomorrow and markets are waiting to see what the bank’s president, Mario Draghi, will say about the state of the regional economy, especially since euro zone inflation fell in July to its lowest level since the height of the financial crisis five years ago.

Earlier today, Lorcan Roche Kelly, one of the most prolific financial-market tweeters who has nearly 14,000 followers, joined us in the forum to give us an idea of what to expect from the ECB and said at most, Draghi will reiterate the central bank’s latest acronyms - TLTRO (Target Long Term Refinancing Operation) and Annual Quarterly Review (AQR) - but is unlikely to spring any new ones on the markets.

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