Markets

AIIB

AIIB, China’s renewed (and controversial) influence

Known as the BRICS bank, the Asian Infrastructure  Investment Bank (AIIB) wants to become an alternative to the IMF and the World Bank.  The initiative led by China adds to Beijing’s ambitious project of recovering the ancient Silk Road. So far, more than 40 countries from the five continents showed their support, proving China’s growing –and controversial– global influence.

 


The effects of QE on peripheral spreads according to Barclays

Barclays: EGB trading in euro area requires caution

The Corner | April 14, 2015 | On Wednesday’s press conference, Mario Draghi is likely to indicate that ECB QE has got off to a good start operationally and price action terms in the market. Barclays analysts think cautious near-term trading is required in EGB spreads, given poor liquidity and lingering Greek worries.

 


Ibex 35

Non-financial Ibex trading at 20x PE of the current year

The Corner | April 14, 2015 | At first sight the Spanish Ibex multiple does not seem particularly stressed (16.2 x PE 12 months forward with a premium of 15% against historical series). But analysts believe that it is actually being affected by optimistic earnings estimates, especially in the banking sector.

 


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Markets know the game: Reducing investors’ EPS expectations so firms can beat them

The Corner | April 12, 2015 | Earnings season is warming up on Wall Street. During the week the major US banks will present their results (tomorrow, JP Morgan and Wells Fargo), which will impact the course of American stocks in the short/medium term. Should US companies show a pessimistic picture with their 1Q earnings, that would mean the US economy is in worse shape than predicted. But are these expectations part of a wider game?




Bank of Spain

ECB’s QE programme allows Spain to enter negative yield club

MADRID | April 9, 2015 | By Francisco LópezThe flurry of good news on the Spanish economy in an election year should be treated with caution. This week the Spanish Treasury placed Treasury letters at negative yields for the first time ever. However it should also be noted that half a dozen European countries have reached this level already and that the driving force behind the historical lows is undoubtedly the ECB’s QE programme


yellen01TC

FED shelves forward guidance

MADRID | April 9, 2015 | By JP Marín ArreseAs the recovery pace of the US economy softens, FED policy makers are growing increasingly reluctant to raise rates too early. The March FOMC minutes released yesterday reveal they could only agree on deleting “patience” when referring to the foreseen tightening of the monetary stance.  Members seem split on the timing, with many openly advocating postponing the move until the end of this year or even into 2016. 


stress tests

European markets reopen

The Corner | April 7, 2015 | European markets reopen this morning, with three areas of specific interest likely to dominate events on trading floors. The first, will be the continued wrangling between Greece and its creditors, with hopes for a deal becoming increasingly slim as the acrimony between the various parties seemingly increased over the weekend. On Wall Street, quarterly results presentations will commence, while traders will also be closely monitoring a swathe of data which may offer an insight as to the future direction of the Fed’s monetary policy.


Ice Age the movie

Negative rates: Ice age for savers

Asoka Wöhrmann (Deutsche AWM) | Negative interest rates are new economic territory. However, as yet, there is no sign of a major cash exodus to avoid sub-zero yields.