Week of November 13, 2011 thru November 19, 2011

ECB's Weidmann:Debt Crisis Decisions Don't Address Key Issues


--No Justification For Extending Mandate Of ECB

FRANKFURT (MNI) - The decisions taken recently to bring an end to the Eurozone debt crisis have failed to address the key issues, European Central Bank Governing Council member Jens Weidmann said on Friday.

"To work out what has to be done, we have to take a look at the root of the crisis and there we find - among several factors - two key items: first, deficiencies in the institutional framework of monetary union, and second, structural deficiencies in various member states," the president of the Bundesbank said in the text of a speech to be given here.

"However, the decisions taken for crisis resolution within the monetary union have so far not addressed these two issues sufficiently," Weidmann said.

IIF Dallara: Institutionalizing PSI Would Hurt Sov Bond Mkt


FRANKFURT (MNI) - Institutionalizing private sector involvement in sovereign debt restructuring would undermine demand for Eurozone debt, Institute of International Finance (IIF) Managing Director Charles Dallara said Friday.

"Voluntary private sector involvement makes sense in Greece and nowhere else," Dallara told reporters on the sidelines of the European Banking Congress.

Institutionalizing PSI as part of Eurozone reform would undermine demand for Eurozone debt and "that is the last thing that we need," Dallara warned.

"Schaeuble and other European leaders must draw the line here," he asserted.

Update: Draghi: Urges Quick Implementation Of EFSF Decisions


FRANKFURT (MNI) - There must be "urgent" implementation of the decisions taken by the Eurozone leaders at recent summits to bolster the capacity of Europe's bailout fund, European Central Bank President Mario Draghi said on Friday.

"Where is the implementation of these long-standing decisions?" Draghi asked rhetorically in a speech at the European Banking Congress here.

He noted that a significant amount of time that had elapsed since the summit at which leaders decided to increase the firepower of the European Financial Stability Facility (EFSF) by authorizing it to buy sovereign bonds, recapitalize banks and provide pre-emptive funding to countries facing challenging situations in the markets.

"We should not be waiting any longer," he said.

Update: BOE Weale: Very Strong Case For More QE In Feb: FT


--Supports View Gilts Market Would Struggle With QE Acceleration

LONDON (MNI) - If things turn out as the Bank of England's November Inflation Report predicted, there will be a very strong case for more quantitative easing in February, Monetary Policy Committee member Martin Weale said in a Financial Times interview.

The Inflation Report forecasts showed CPI heading well below its 2.0% target, to stand around 1.3% in two years' time.

BOE Weale: Very Strong Case For More QE In Feb: FT


LONDON (MNI) - If things turn out as the Bank of England's November Inflation Report predicted, there will be a very strong case for more quantitative easing in February, Monetary Policy Committee member Martin Weale said in a Financial Times interview.

The Inflation Report forecasts showed CPI heading well below its 2.0% target, to stand around 1.3% in two years' time. This has raised debate among analysts over whether the MPC will wait until February before providing further stimulus, or increase QE before then.

In the interview Weale comes out in favour of February, when the next Inflation Report will be issued and when the current Sg75 billion round of asset purchases expires.

Draghi: Calls For "Urgent" Implementation Of EFSF Decisions


FRANKFURT (MNI) - There must be "urgent" implementation of the decisions taken by the Eurozone leaders at recent summits to bolster the capacity of Europe's bailout fund, European Central Bank President Mario Draghi said on Friday.

"Where is the implementation of these long-standing decisions?" Draghi asked rhetorically in a speech at the European Banking Congress here.

He noted that a significant amount of time that had elapsed since the summit at which leaders decided to increase the firepower of the European Financial Stability Facility (EFSF) by authorizing it to buy sovereign bonds, recapitalize banks and provide pre-emptive funding to countries facing challenging situations in the markets.

"We should not be waiting any longer," he said.

China Economic Data Calendar


All figures year-over-year percent changes unless otherwise specified.

Date Time For Event Previous Local/GMT

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25 Nov 0935/0135 Nov MNI China Business Sentiment Survey +58.47 25 Nov 1030/0230 Nov Flash Purchasing Manager's Index (HSBC) +51.1 01 Dec 0900/0100 Nov Purchasing Manager's Index (CFLP) +50.4 01 Dec 1030/0230 Nov Purchasing Manager's Index (HSBC) +51.0 09 Dec 0930/0130 Nov CPI (% y/y, % ytd y/y) +5.5/+5.6 09 Dec 0930/0130 Nov PPI (% y/y, % ytd y/y) +5.0/+6.8 09 Dec 1330/0530 Nov Fixed-Asset Invest (%ytd y/y) +24.9 09 Dec 1330/0530 Nov Retail Sales (% y/y,

ECB Makuch: ECB Will Do What Needed; No Comment On Bond Buys


FRANKFURT (MNI) - European Central Bank Governing Council member Josef Makuch said here today that "the ECB will do what is needed" to address the crisis, but he declined to comment on whether that might include a large-scale increase in its purchases of distressed sovereign bonds.

Makuch, who heads the central bank of Slovakia, said the "situation in Italy is serious," but he expressed confidence in the new government of Mario Monti, saying "of course" it would improve the situation.

"In Italy, the new government will do a lot of things, new measures. Let's give them time," he said.

Monti's new "technical government" won a vote of confidence in the Italian Senate Thursday night and is expected to be endorsed today in the lower house of Parliament.

China Money Week: Profit-Taking Hits But Rally To Resume


BEIJING (MNI) - Chinese bond yields rebounded this week after recent sharp declines, though traders said the downwards trend is intact as the central bank appears set to ease policy more in the weeks and months ahead.

Japan Oct Department Store Sales -0.5% Y/Y, Vs -2.4% In Sep


TOKYO (MNI) - Department store sales in Japan fell 0.5% in October, posting the fourth straight year-on-year drop, data released by the Japan Department Stores Association showed on Friday.

But the association said the October sales were "firm" as the October y/y drop was relatively small, compared with -2.4% in September and -1.7% in August.

The association said falls in temperatures boosted demand for autumn and winter clothing, and as a slump in purchases by overseas customers triggered by the Fukushima nuclear radiation crisis, gradually eased.

The association compiles data from 86 companies running 254 department stores that have been open for at least a year prior to the survey being conducted.