Articles by The Corner

Scotland independence referendum

Scotland referendum: ‘Yes’ victory would hurt UK risk premium

MADRID | The Corner | The pound fell around 1% against the euro on Monday and the dollar after the results of the first serious poll giving the victory to “yes” in the referendum on separation for Scotland. According to the latest YouGov poll published  a day before, the support of Scottish independents would reach 51% vs 49% who are against if the undecided are excluded. UBS economist Paul Donovan commented about the risk of a narrow result in the polls in favor of remaining in the UK, similar to what happened in Quebec in 1995.

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Peripheral bonds at minimums will make financing costs plummet

MADRID | The Corner | The last ECB measures will apease investors who see that once again central banks are betting on the economy although this means forcing their mandates. And they had an immediate effect on the EU’s peripheral bonds: Spanish 10-year-bond yield closed at 2.05% and 5-year-bond at 0.72%, while risk premiums fell to multi-year lows. This will serve to drastically reduce the cost of financing and making it much easier for large companies to  get funding. The euro’s strong devaluation against major world currencies should serve to increase the competitiveness of European producers and increase the region’s exports, analysts at Link commented on Monday.

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Predictions pleasant and unpleasant for the world a century from now

MASSACHUSETTS | By Richard N. Cooper via Caixin | John Maynard Keynes gave an address in Madrid in 1930 called on the Economic Possibilities of Our Grandchildren and set a century in the future. The year 2030 is still 16 years away, but the world is almost there. Anticipating its arrival, a Spanish economist asked 10 prominent economists, among them three winners of the Nobel prize, to reflect on what the next century might bring in the way of economic and other developments, recently published as In 100 Years.


Dijsselbloem hangs onto the Eurogroup Presidency: “I have a job”

BRUSSELS | By Alexandre Mato | After displaying a substantial diplomacy effort during the summer, Spain may be losing the battle. Jeroem Dijsselbloem wants to keep himself as Eurogroup President with the goodwill of his goverment. At the boxing ring’s opposite corner is Spain’s candidate, Economy Minister Luis de Guindos. In front of the Europarliament Economic Committe on Thursday, Dijsselbloem insisted that his term will end in July next year and he is “determined to fulfill it”. 

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Spanish banks seek profits without lending

MADRID | By Francisco López | The purchase of Barclays’ retail banking division in Spain by CaixaBank has further accentuated the gap among the three major lenders (Santander, BBVA and Caixa) from the rest of their competitors. Experts insist on this process of bipolarisation of the Spanish banking system, with very big banks in the national and even international level, and other local, small or very specialised banks. All banks have done their homework with the restructuring, but now they face the most complicated challenge: to adapt their business models to the new scenario emerged after the crisis and become profitable again.


ECB will give banks money to spend and punish those who sit on their hands

MADRID | The Corner | Mario Draghi finally unveiled the European Central Bank’s betting on further stimulating the eurozone: benchmark main refinancing rate will be cut from 0.15 per cent to 0.05 per cent and marginal deposit facility risen 0.1 per cent to 0.2 per cent. Also a programme to purchase a “broad portfolio of transparent asset-backed securities” will be in place from October this year. Thus, the ECB becomes the first central bank to announce large-scale asset purchases and negative deposit rates. Reactions were quick: the euro fell below the key threshold of $1.3 to hit a low of $1.2995. 

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Europe’s PMIs mixed data confirms the need of new, strong action from ECB

MADRID | The Corner | August PMI figures confirm what investors already know: Europe’s economy continues to expand at a very low rate. Indeed, the final data have been revised downwards in those cases where no changes were expected, and they are worse than July’s. Final services PMI: 53.1 vs. 53.5 preliminary and 54.2 in July (highest level of the last 3 years). Specifically, PMI services index in Spain rose to 58.1 points in August from 56.2 in July, representing the biggest increase since December 2006. The consensus of analysts expected a slightly lower number of 55.5 points.

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Eurostoxx 50 analysis | Airbus

MADRID | The Corner | Although our experts like Airbus, in the medium/long term, they recommend to wait until uncertainties in the aeronautical sector go away betting on the stock. Check their full report.

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Air pollution: Time for clean air lobbying

MADRID | The Corner | Around 400,000 people die prematurely in the EU due to air pollution-related problems, costing health systems around €330 billion and €940 billion. Brussels-based non profit EBB (European Biodiesel Board), lobbying for this type of fuel, measured air pollution levels in different areas of the city: they were between 60 and 120 times above considered clean standards. Schadenfreude fans: last year Beijing residents suffered 40 times the recommended maximum exposure limit set by the World Health Organization.