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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.
ECB1

Markets 4th October 2014

ECB: More questions than answers

MADRID | The Corner | The ECB disappointed all those who were keen to gain more concrete information on how it wants to expand its balance sheet over the coming months. Instead, Mr Draghi pointed out that inflation expectations, not balance sheet size, remain the ultimate yardstick of current and future ECB action. “We think this is the right communications strategy as we had become concerned that the ECB would set fairly explicit balance sheet targets that it might struggle to attain. The ECB offered a more cautious assessment of the growth and inflation outlook and left the door open for additional unconventional measures. Nevertheless, our base case scenario remains that sovereign QE will not be triggered,” UBS analysts commented.

moscovici hearing

In Europe 3rd October 2014

Moscovici: between French drive and German rigour

BRUSSELS | By Alexandre Mato | “I’m French, I’m deeply French, I will remain French”, the former finance Minister said before EU legislators, eliciting uproarious laughs from those present, a remark which was followed by a declaration of independence “but here I will stand as a European Commissioner”. There is much at stake, and Pierre Moscovici was attempting to reassure Europe that his was a brief to ensure growth in an economy that can scarcely afford the spending required to do so.

 

ECB

Markets 2nd October 2014

ECB officially unveils its much awaited next move- yet not its size

Madrid | The Corner | We imagined the ECB wouldn’t unveil specific details about the size and form of its next move. Mario Draghi just explained on Thursday that they will be acquiring private sector assets: covered bonds from eurozone banks in mid-October and asset-backed securities (ABS) at some point in 4Q14 and for at least two years. The Frankfurt based institution kept rates at 0.05% and will be expanding its balance sheet up to March 2012 levels, which is, €1Tr, in order to spur the economic recovery.

No Picture

Spanish economy 2nd October 2014

2014 Spain’s fiscal adjustment on target; 2015 more challenging

(By Barclays) | The Spanish government presented the details of the 2015 draft fiscal budget on Wednesday and the updated macroeconomic outlook underpinning it. There are few changes on the fiscal targets and projections, although the government now expects the economy to grow this year by 1.3% and next by 2% (Barclays: 1.2% and 1.8%). The budget minister in the press conference saw very little risk of the sovereign meeting the deficit target of 5.5% of GDP this year. 

No Picture

World economy 2nd October 2014

China PMI fails to inspire

LONDON | By Christian Keller at Barclays | China’s official manufacturing PMI was flat at 51.1in September, slightly below Barclays’ forecast (51.3), but marginally above consensus of 51.0. The data reaffirmed the trend of improving external demand, but soft domestic demand. The China PMI data had a limited market impact, with local markets closed for National Day while AUD fell following the weak sales outcome. 

No Picture

Markets 1st October 2014

ABS drive, to the point

MADRID | The Corner | Mario Draghi will finally reveal the details of the private debt purchases program on Thursday. Markets take for granted that he will continue feeding expectations that he is willing to do more if necessary. The ECB’s President is however not likely to announce the acquisition of retained ABS, nor to include the so-called mezzanine tranches. As for the rumours about Mr Draghi pushing the ECB to eventually buy bundles of Greek and Cypriot bank loans with “junk” ratings, our readers should note that those tranches would be senior, and in very small amounts. However, “symbolically is an important issue about what they are willing to do,” JPMorgan analysts pointed out on Wednesday.

 

 

No Picture

Markets 1st October 2014

Greek debt viable, no haircut needed

MADRID | The Corner | As Greece and its euro-area creditors meet on Thursday to review its progress ahead of another round of talks on repayment terms for its public deb, the worst for Athens seems to be over. The Mediterranean country doesn’t need a haircut, its debt is sustainable, as head of the EFSF ESM Klaus Regling commented in Brussels on Tuesday. However, and despite the profound, painful reforms the country has been through, recovery is hampered by private debt of households and companies: about 164 billion euros ($208 billion), 90% of GDP.

BCE's QE

In Europe 30th September 2014

ECB’s QE: how it can really work (or fail)

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.