The indicators on credit risk are showing clear signs of improvement. The NPL ratio for the whole of the banking system fell to 11.0% in June (vs 12.5% in December 2014), the lowest level since April 2013.
Chancellor Angela Merkel’s ‘open door’ refugee policy could cost her her job as well as cause an unwanted shift to the right in Germany.
Jens Bastian via Macropolis | The 49 prior and pending actions that have to be adopted by the Greek government by mid-October in order for urgently needed financial assistance to be released are a work in progress taking place under severe time constraints.
The European financial center still cherishes the hope that the debt markets will brighten up before the end of the year. It would help if the catastrophic headlines stopped.
Nicolas Veron | In mid-July 2014, in his maiden policy speech at the European Parliament as president-elect of the European Commission, Jean-Claude Juncker promised to create a European “Capital Markets Union.” As he explained it: “To improve the financing of our economy, we should further develop and integrate capital markets.
BARCLAYS | Potential reduction in car production as a result of the Volkswagen emissions scandal may negatively affect growth in Central Europe – we believe VW factories generate 0.5- 2.9% of GDP in Czech Republic, Slovakia, Hungary and Poland.
Nick Malkoutzis via Macropolis | The nexus of Greece’s most challenging problems, and perhaps the ones that will make or break the current government, were indirectly highlighted by Prime Minister Alexis Tsipras last week.
UBS | We remain constructive on the European real estate sector. As a bond proxy with growth , real estate benefits from current central bank stimulus, while it can also gain through rental growth in an inflationary environment, should the stimulus prove successful. For Spain, we upgrade Hispania to Buy and downgrade Merlin to Neutral.
BARCLAYS | We have been arguing for some time that we see no grounds for attaching a high probability to a reflation scenario for the euro area, at least in the near term
Focus in Europe today will be on the ECB and the Bank of England’s meetings. Neither Draghi nor Carney will change the course of their monetary policy.