The latest batch of economic growth numbers corroborate a picture which we started to see last year, namely that the extent of the Eurozone recovery is widening. Germany is no longer the sole growth driver. Countries like Spain are catching up.
José Luis M. Campuzano (Spanish Banking Association) | The markets are discounting that in the next few months we will see greater certainty in monetary normalisation strategy. The start of the Fed’s balance sheet adjustment can also provide the rest of the central banks with information on the reversion of quantitative measures.
Ecofin agreed last week on a set of actions to be undertaken between now and end-2018 to reduce EU banks’ amounting €921 billion in September 2016 (almost 9% of the euro area’s GDP. At last the EU finance ministers acknowledged that possible “negative cross-border spillovers” from high NPL ratios in some member states require a common EU strategy to address the problem.
Suprising as it may be, 18 of the 19 members of the Eurozone saw an increase in GDP in Q1’17 with respect to Q4’16. Spain’s GDP improved by 0.6%; Italy managed to grow (0.2%); Germany and France clocked up a 0.4% rise. Only Greece remained in the red. The unemployment rate in the region has officially fallen to 9.6%…there is growth.
Fernando Rodríguez | The MifidII obliges the 100,000 professionals who inform and advise on finances in Spain to be accredited as being technically qualified to do this job by January 2018. Spain is the only country in Europe which doesn’t have any regulation in place regarding professional qualifications.
A decent rebound in eurozone equities in recent weeks brought up concerns that the market might already be overvalued by now. Julius Baer’s research clarifies that “valuation is not the main driver of our asset allocation as earnings definitively remain more important”. However, valuation is easy to observe and thus attracts quite some attention. One of the measures they are following is the equity risk premium.
The balancing acts which are devised in Frankfurt oblige us to once again take a look at the present and future of inflation in the Eurozone, focusing our analysis on the prices chain. “The ECB did this exercise and the conclusions favour the institution’s caution,” they explain.
The surprisingly low annual eurozone inflation reading for March at 1.5% will finally end speculation about an earlier end to the negative deposit rate in today’s ECB’s governing council meeting, as reported by Julius Bär’s experts. Both ECB Chief Economist Peter Praet and ECB President Mario Draghi have already made clear in recent weeks that interest rates will not rise before the ECB’s asset-purchasing programme comes to an end.
J.L.M. Campuzano (Spanish Banking Association) | According to Eurostat, the business investment rate in the last quarter of 2016 grew to 23.5% from 22% in the previous quarter. We are talking about reaching pre-crisis levels.
Housing prices in the Eurozone rose 4.1% in the fourth quarter of 2016 from a year earlier, the highest interannual increase since the third quarter of 2007, according to Eurostat data. In Spain, the average rise in prices remained at 4.4%.