MADRID | April 9, 2015 | By Francisco López | The 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.
LONDON | March 18, 2015 | By Víctor Jiménez | The effects of QE have already begun to reverberate through the arteries of Europe’s financial heart in the City of London. Indeed, there is a tsunami of money flooding the market, corporate bonds sub-investment market. That below triple B ratings market is the ‘acid test’: the ECB’s bet has been dragging down the price of investors and asset managers’ portfolios, who are desperate to find substantial interest rates and return to positive territory.
The Corner | March 11, 2015 | The euro sinked to 12-year lows on Wednesday due to the ECB’s money printing –which is pushing yields down (German 30-year government bonds are now lower than those on U.S. two-year paper), and increasing expectations of a rates hike on the other side of the Atlantic. ECB’s Governing Council member Ewald Nowotny insisted that negative bond yields in the euro area probably won’t remain for long.
The Corner | March 9, 2015 | Peripheral bonds hit minimum lows on Monday as the ECB and the 19 national central banks started the much-awaited sovereign puchases on Monday. Short-term eurozone interest rates are expected to move deeper into negative territory as the QE unfolds. “This programme will mean a safety net for the eurozone equities and bond markets. However, we might see some corrections,” experts at Link Securities commented. Liquidity injected in the system “will first push bond prices up, but almost simultaneously will move towards equities,” Bankinter analysts noted.
MADRID | February 27, 2015 | J.J Fernandez-Figares| Link Securities | Efforts by the ECB to inject money into the euro zone are already showing signs of impact as positive M3 figures offer encouragement ahead of March purchases of sovereign bonds.
The Corner | February 24, 2015 | Figures published today will give an indication of the current state-of-play in the euro zone, with the release of inflation statistics and final GDP figures from the German economy for 2014.
MADRID | The Corner | Inflation in the eurozone is not picking up. Expectations aren’t either. And the ECB’s balance sheet expansion is almost inexistent. PMI indicators (which the central bank is closely watching) are trending downwards. In this context, Barclays analysts comment, it is not strange that markets are expecting more QE from the Frankfurt. But when? Probably not this week.
MADRID | By Javier Arce | The true danger of a third recession in the eurozone can dissipate, and quickly. Only if after the stress test and the banking union, the euro’s depreciation, the EQ, the takeover of Juncker and its new Commission… we realize that we live in El Ejido, and not in Hernani. Let me explain that.