MADRID | The Corner | The idea that quantitative easing has been helping equities of the EM has been widely discussed: many believe the liquidity generated by QE is used to play the “carry”, and that’s why the end of QE and the rates rises may lead to the withdrawal of those positions. But that’s not so clear.
LONDON | By Tal Shapsa at Barclays | Our export performance analysis points to a positive outlook for the fragile five of the emerging countries. A simple model we developed – which attempts to gauge future changes in the current accounts based on the export performance indices – suggests that the recent improvement will likely be sustained, providing additional tailwind for EM trades and carry in particular.
BEIJING | By Andy Xie | The fact that emerging market economies have not borrowed in foreign currencies means there’s a way out, and a soft landing will be helped if China keeps its currency stable.
MADRID | By Francisco López | Argentina’s devaluation contagion pulled downwards such different assets as Brazil Stock Exchange, Argentinian or South African currency , or even Indonesia’s bonds. In Spain, the Ibex fell again by 1.1% losing 6.7% points in just six days, which means its hardest time in past twelve months. When panic spreads, investors do not consider each countries’ economic circumstaces individually.
LONDON | By Cagdas Aksu | The Fed’s dovish surprise in the September FOMC meeting should benefit core peripheral spreads for several reasons. First, we note that even amid all the Fed tapering concerns since May, core periphery spreads versus Germany have behaved very well and never underperformed much, despite the sell-offs seen in other riskier asset classes, such as emerging markets and certain segments of credits markets.
MADRID | By J.P. Marín Arrese | Christine Lagarde’s stern warning on potential problems ahead for emerging countries has been delivered in rather a blunt way: “even with the best of efforts the dam might leak”. At the annual Fed gathering in Wyoming she claimed “further lines of defence” were needed to address a financial crisis. The hike in interest rates following the prospect of a progressive tapering in asset purchases by the US, has induced a sharp reversal in fund flows between developed and emerging markets.
BARCELONA | By CaixaBank research | It is the euro area that is most dependent on exports. That is why the EU has once again started to discuss the urgent need to carry out an ambitious agenda of structural reforms.
By CaixaBank research team, in Barcelona | Of the events occurring recently on the world economic scene, three have significantly affected the current fate of…
La Caixa research team, in Barcelona | The role played recently by central banks in the current scenario is being decisive. Since 2008, they have demonstrated…
MADRID | Banco Santander registered a net attributable profit of €1.604 billion in the first quarter of 2012, a decline of 24% year on year….