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spain-italy

In Europe 22nd June 2014

The fair value for Italian and Spanish spreads

LONDON | Cagdas Aksy at Barclays | A model framework, which takes into account economic/fiscal fundamentals and risk aversion factors, indicates a fair value level of about 200bp for 10y Italy and Spain vs Germany. The high debt problem for most peripheral countries is something that will take many years to reverse and the ECB’s commitment through OMT and potential QE can contain these concerns to a large extent, as long as it maintains its credibility. Under this more optimistic scenario, fair value moves down to 90-100bp. After 350-400bp of tightening over the past two years, 10y core periphery spreads are 30-40bp away from stretched levels.

china in greece 2

In Europe 21st June 2014

Chinese investments in Greece to be boosted by new agreements

ATHENS | Via Macropolis | Greece hopes to sign agreements for investments worth 6-7 billion dollars during the three-day visit of the Chinese Prime Minister Li Keqiang. This is the first visit to Greece by a top Chinese official for four years. Two thirds of the plannned investments relate to the shipping sector and mainly involve financing from from the China Development Bank for the building of Greek ships in Chinese shipyards. The remainder is mainly related to investments in the energy and real estate sectors.

No Picture

In Europe 20th June 2014

Bank of Spain rises growth estimates to 2% by 2015

MADRID | By The Corner | Deputy Governor of Spanish central bank Fernando Restoy said on Friday that the country’s economy will register year-on-year growth rates near 2% at the end of year 2015, according to their last estimates. However, he suggested that “restoring the pre-crisis welfare levels will still take several years.”

SNB

In Europe 20th June 2014

Swiss watchdog asks UBS and Credit Suisse to rise leveraging ratios

MADRID | By The Corner | Swiss national bank has pointed out that the country’s two big entities UBS and Credit Suisse should reinforce their leveraging ratios in order to increase their protection against eventual risks, including legal disputes. Furthermore, UBS could be fined between €4.9- 7.3 bn after manipulating exchange rates. Credit Suisse has already paid $3.7 bn to settle legal cases in the U.S. over helping Americans evade taxes and the sale of mortgages to Fannie Mae and Freddie Mac.

No Picture

In Europe 19th June 2014

Amid a deep restructuring process, Spain gets new King

MADRID | By Juan Ballesta | Spain’s new King Felipe VI took the throne on Wednesday night, declaring his commitment to carrying out the transformations needed. The once severely crisis-battered country is finally seeing the light at the end of the tunnel, seeing his international financing costs going down and growth rate timidly increasing but still fighting with a huge unemployment rate and deficit.

Spanishinvestments

In Europe 18th June 2014

Spanish businessmen are the eurozone’s most investment-friendly

MADRID| By The Corner | Spain is to lead the EU economic recovery until 2018, according to Morgan Stanley. External sector, capital spending and internal demand would be the factors pushing the country’s growth. Regarding capex, Spanish businesses are the most inclined to rise their investment expenditure in manufacturing during year 2014 in order to boost production capacity. 

Germany's toll road

In Europe 18th June 2014

IMF: More German investment to strengthen the EZ

BERLIN | By Alberto Lozano | The ECB and ‘peripheral’ countries cannot do all the work by themselves. The eurozone needs to move away from deflation and to emerge definitely from recession with a sustainable growth. As the International Monetary Fund recently concluded about Germany, the EU biggest economy could “strengthen its role as an anchor of regional stability.” But could more investment in Germany have a real impact in their neighbour’s economies?

No Picture

In Europe 18th June 2014

TLTRO: An X-Ray

MADRID | By Carlos Díaz Güell | Last week’s greatest news for SMEs were the Targeted Long Term Refinancing Operations (TLTRO), variety of LTROs that got a T standing for target. Banks will be allowed to borrow money at 0.25% interest rate at 4 years max.