J.L.M. Campuzano | Financial integration is a relevant factor for financial stability and facilitates the transmission of monetary policy. A few days ago, the ECB published an update on financial integration.
Miguel Navascués | When the signs of an incipient slowdown in the European economy begin to multiply – the matching indicators suggest that industrial production slowed in 2018 – the case for reaching an agreement on Brexit and refocusing attention on unifying the capital markets becomes increasingly more powerful and urgent.
Yesterday, April 19, after being flat for months, with no pulse, the Euribor finally showed signs of life. It moved from the range of -0.190% (average for April) to -0.189%. One basis point.
Javier Arce | The ECB does not get the banks to move their money, interbank market is still broken and eurozone lenders are accumulating the ECB’s liquidity injections (almost 700bn) at the central bank itself.
The Spanish government has this week officially announced the candidacy of Economy Minister Luis de Guindos for the Vice-Presidency of the ECB, substituting the Portuguese Vitor Constancio. De Guindos already tried to move to Brussels as a substitute for Dijsselbloem at the head of the Eurogroup. But the bet didn’t turn out well.
Spain’s government bond rating has been upgraded by Fitch to A- from Baa+, Greece has also seen the rating lifted by Standard &Poor’s, and the US once again experiences a shutdown of non-essential government operations. The biggest topic for the bond market, however, will be the press conference of the European Central Bank (ECB) scheduled for Thursday.
Analysts at Bankinter offer an investment strategy for the European banks ahead of the new year. Overall they reiterate their recommendation to maintain a structural position in banks due to the improvment in the quality of their balances and the recovery in business volumes.
US Fed chair Janet Yellen and ECB President Mario Draghi will both be speaking at the Jackson Hole conference later this week. They will be under close scrutiny from investors for any clues on future monetary policy decisions. Analysts believe the Fed should matter more than the ECB at this week’s event.
Pablo García Gómez (Carax Alphavalue) |Sector earnings from Europe for the second half of 2017 have been overall solid, with some positive surprises from “heavy cyclicals” like oil and metals and mining.
Tapering will come anyway, largely because of technical/ political constraints around QE. The ECB will still have to justify this with a macroeconomic narrative. This is what the ECB President has set out to do.However, experts at BoAML believe that what he said yesterday in Sintra central bankers summit is also consistent with a very slow exit.