According to leaks to Reuters about the future format of TLTROs, the third edition of these operations will be designed to limit entities’ appetite for them, with options like toughening the rules for collateral and the establishment of more ambitious targets for credit volumes. According to ECB sources, this reflects the belief that Eurozone economic fundamentals are stronger than in previous years.
Articles by Francisco Vidal
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Francisco Vidal (Intermoney) | In yoy terms, Spain did not grow at the initially targeted 3% and 2.7% during the first two quarters, but it did at 2.8% and the 2.5%, respectively. Therefore, the growth figures begin to signal a certain moderation and show the maturity of the economic cycle.
In the initiative launched by the Italian authorities towards Brussels, the adequate single approach of avoiding confrontation and waiting to have all the information before commiting itself has been confirmed. The President of the Eurogroup reinforced this approach yesterday by recalling that the creation of a budget is a long process and that he will have to await the draft before giving a firm opinion.
Intermoney | The unanimous approval by the Senate of a law to reduce or eliminate the tariffs applied to around 1,660 products made outside the US, of which half are made in China, could be the perfect excuse for Trump to return to the charge on trade attacks on Chinese interests. However, as we have insisted over the last few weeks, the key to the summer from a Chinese perspective, could lie more in the yuan than trade issues.
Intermoney | Other risks to which we must pay attention are those arising from emerging markets. In this case, one should not focus only on one country, as there are numerous fronts open. For example, the latest update to the IMF forecasts cut the growth forecasts for Argentina and Brazil, stressing the more difficult finanacial conditions and the need for adjustments to the Argentinian economy while, in the case of Brazil, it stressed the effect of strikes and political instability.
Facebook and Twitter have been significantly punished by investors following figures about users which created doubts about the performance of both companies in the future. In the first case, the number of users active per month increased 1.74% in 2018 to pass from 2.196 millions to 2.234 million, disappointing market expectations and delivering the smallest increase since Facebook provided figures.
There has been talk for some time about the impact of commercial tensions. But it is clear that palpable consequences remain in the future. Above all when the maintenance of a positive inertia in the global economy could lead to a situation where world trade increases further before starting to worsen.
Now “the waters appear to have calmed” in Italy, analysts at Intermoney, however, believe we will see more episodes of tension originating in Italy. The key moment is likely to come at the end of the summer or in the autumn. This situation should be seen as a scenario for tension rather than rupture, although contagion to other peripheral economies could be possible.
Francisco Vidal (Intermoney) | The next few days will be interesting as EU leaders confront the future of the European project, although they will also have to deal with the latest developments on Brexit, and no doubt dedicate time to US commercial belligerence.
For a long time, Spain has had a “debt pending” in terms of budgetary stability. And, for the time being, the current scenario leads us to think that balancing the public finances is a difficult objective to achieve in the medium-term. Added to that problem is the high level of government debt.