euro

Economic sentiment indicator

Economic sentiment worsens in Italy, Germany and France, but remains stable in Spain

MADRID | The Corner | In August the Economic Sentiment Indicator (ESI) fell in the euro area (by 1.5 points to 100.6) and the EU (by 1.2 points at 104.6). Once again the core Europe does not bring any good news, where sentiment dropped in Italy (by 4.1p to 97.8), Germany (by 1.9p to 104.1 ) and France (by 0.6p to 95.1), while sentiment remained flat in Spain (103.).  Among the data published by the European Commission today, the industrial confidence fell in the EA to -5.3 in August from -3.8 in July and construction sentiment dropped to -28.4 from -28.2. Sentiment in the services industry declined to 3.1 from 3.6 and retail trade to -4.6 from -2.3. Consumer confidence remained at -10.


No Picture

Hollande’s new government ready for reforms

MADRID | The Corner | The economy is stagnant, the confidence of businesses and consumers continues to decline and unemployment is touching new highs. France is being forced to carry out reforms from all sides, hence François Hollande and Manuel Valls have chosen the social democrat Emmanuel Macron as Minister of Economy, confirming their willingness to pursue the economic reform agenda.


IFO

Germany’s business climate continues to worsen, but labor market keeps its strength

BERLIN | By Alberto Lozano | German IFO index has shown today that business climate continues to worsen. The German Business Sentiment registered its fourth consecutive decline after falling 1.7 points from the previous month to 106.3 points, representing its worst reading since July 2013 decline. “The German economy continues to lose steam”, indicates Hans-Werner Sinn, president of the IFO Institute. “The outlook for the coming months also deteriorated noticeably.”


No Picture

Draghi’s speech marks a turning point in ECB rhetoric

MADRID | The Corner | Although it is not part of ECB’s mandate, last Friday in Jackson Hole, President Mario Draghi spoke about what needs to be done in the euro area to address the problem of high unemployment and weak economic growth. As Barclays analysts believe, the speech “represented a significant breakthrough in the ECB rhetoric and will probably have significant implications regarding the debate just about to start between European government on policies that need to be deployed to avoid a ‘triple-dip recession’ and a fall in outright deflation.”


Greece's return

The challenge in Greece: Funding an emerging economic recovery

ATHENS | By Jens Bastian via Macropolis | A fragile, uneven and weak recovery is gradually manifesting itself in the real economy of Greece. The recent data published by ELSTAT for the first two quarters of GDP performance in 2014 suggests that Greece is on course to register its first quarterly GDP level in positive territory in the third quarter this year.

greece

The IMF crisis and how to solve it

ATHENS | By Gabriel Sterne via The Agora | The IMF is approaching its 70th birthday and the Greek programme has been a candidate for one of the most credibility-sapping in its history. Here I trace the IMF’s role in programme from its stormy launch; its misfiring implementation; the Fund’s half-hearted apology; and ongoing efforts to draw lessons and revise its sovereign debt restructuring framework, which appear destined to deliver insufficient meaningful change.  A transparency revolution is both necessary and feasible. It worked for central banks in the 1990s. Why not the Fund?


yuan-dollar-paperplane

RMB as reserve: Rebalancing the global financial system

By Peter Wong via Caixin | It is unlikely that the RMB or yuan, China’s “people’s currency,” will replace the dollar outright as the world’s only investment and reserve currency any time in the foreseeable future. But there is every indication that the dollar will have to make room for a second global reserve currency within the next 15 years. A revolution allowing investors to diversify risk – and creating a system with more choice and better ability to resist shocks – should be welcomed.


catalonia

Catalonia exit: a financially doomed move

MADRID | By J. P. Marín Arrese | Water and power supply would be secured should Catalonia become an independent nation. That’s the only reassuring conclusion the economic think tank set up by the regional government has recently reached. On handling monetary and financial issues, it points to severe problems ahead. 


eurodollar_1903856b

Why hasn’t the Euro fallen more?

MADRID | The Corner | The EUR/USD dropped nearly 4 cents from its maximum area in 2014 (very close to 1.40) with a movement that began on 8 may, when Mario Draghi announced that a package of monetary stimulus / liquidity would be used at the June 5 meeting (refi rates drop in 10bp, negative deposit type, completion sterilization SMP and quarterly TLTRO). Why hasn’t the Euro fallen more?