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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.
Spain ratings

Spanish economy 29th May 2020

The Spanish Economy Has Entered Deflation After The Health Crisis

Link Securities | According to preliminary data from the Spanish National Institute of Statistics (INE), the Consumer Price Index (CPI) fell to -1% year-on-year in May (-0.7% in April). The drop reflected the decline in fuel and oil prices, while food prices continued to rise. May inflation has not seen a decline to -1% since 2016. We do not rule out that the entire Eurozone could end up heading into deflation over the coming months, at least those economies most penalized by the pandemic.

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Spanish economy 29th May 2020

The Spanish Export Sector’s Deterioration Due To The Health Crisis Is In Line With The Eurozone: A Fall Of Around 3%

Bankia Estudios | As expected, the improvement in the external sector observed in the first two months of the year did not continue in March. The Covid-19 crisis hit both exports and imports hard, with setbacks of more than 14% year-on-year: only trade in chemical products, mainly medicines, and food was exempt from the contraction. The Q1’20 accumulated drop in Spanish exports (3%) is similar to the one noted in the EMU (3.2%) and Germany (3.3%), but much lower than that in France (8.6%). 

 

trump and xi

In the World, World economy, World politics 28th May 2020

Markets Shrug Off Sino-US Tensions

Yves Bonzon (Julius Baer)| The tensions between Washington and Beijing seem to be increasing almost every day. After the US administration ratcheted up its criticism of China’s response to the coronavirus outbreak, trade tensions have again heated up. News has emerged that China would like to renegotiate the phase-1 trade agreement signed earlier this year as it is increasingly viewed as unfair domestically. This has categorically been ruled out by US President Donald Trump.

Endesa energy poverty

Ibex, Markets 28th May 2020

Endesa Develops The First European Plan For The Use Of ‘Blockchain’ In Cases Of Energy Poverty

Endesa has completed the development and validation phase with real users of the ‘Confia’ project, which is a pioneer in Europe. Thanks to ‘blockchain’ technology, it will enable the processing of cases of energy poverty to be speeded up as much as possible. The project is part of Endesa’s commitment to the fight against energy poverty. The company currently has more than 270 agreements in force.

EU

European economy 28th May 2020

The EU Recovery Fund Entails Partial Debt Mutualization And Fosters European Financial Integration

Axel Botte (Ostrum AM) | The EC recovery package “Recovery and Resilience Facility” draws on the joint France-Germany initiative to promote recovery efforts in Europe. Importantly, transfers across countries are no longer taboo. It is a great step forward to tackle increasing divergence in economic performances of member states. Under the proposal, the Commission will issue bonds with different maturities with the aim of minimizing funding cost.

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In Europe 28th May 2020

Italy And Spain, The Countries To Benefit Most From The Recovery Fund: €172.8 Bn And €140 Bn, Respectively, Between Transfers And Loans

The Recovery Fund exceeds the Merkel/Macron proposals with an amount of €750 billion euros (equivalent to 5.4% of the EU27’s annual GDP). Italy and Spain would be the countries to most benefit. This was something that was quickly reflected in the performance of peripheral credit on Wednesday, especially in the financial sector, with improvements on average of about 10bp in the CDS of banks in both countries. For its part, France and Germany will receive transfers of 39 Bn and 29 Bn, respectively.

recoveryfund

European economy 28th May 2020

Historic EU Stimulus: Outstrips Expectations To €750 Bn

The Next Generation EU fund, which is meant to address the eurozone’s main financing needs to counter the crisis, consists of €500bn delivered as grants according to country- specific financing needs and €250bn credited as loans. The news boosted the euro initially as the plans outstrip expectations for €500bn in funding previously proposed by Merkel and Macron.

EconomicSituationIndex

World economy 27th May 2020

How, For The USA, To Find A Balanced Momentum After Such A Shock?

Philippe Waechter (Natixis AM) | The CFNAI index, calculated by the Chicago Fed, is the best measure of the economic situation as it is. It is a composite of 85 indicators published in one month. It includes industrial production, retail sales, employment and many more. It is published late compared to the surveys, but it perfectly reflects the state of the business cycle. It reads on average over 3 months and when it is greater than -0.7, the probability of recession is almost zero. Below this threshold, the risk of recession is high. See here for more details. In April, the index dropped more than 10 points to -16.74 from -4.97 in March. Its three-month average was -7.22 compared to -1.69 in March. The indicator is well below the threshold of -0.7. As the graph shows, The index is also well below the measures observed in 2008/2009. The shock is of a different kind and magnitude never before seen. This curve has the same pace as that of employment which in April contracted by 20.5 million.

The ratio of NPLs could be close to 3%in Europe in 2020

European politics 27th May 2020

While Waiting For A Plan Which Keeps Both North And South Happy, the EU Considers New Green Taxes To Finance It

An important day in Europe today. The European Commission will present its proposal for a post-coronavirus economic recovery plan. Ursula Von de Leyen will seek to find a compromise between the demands of the countries most affected by the pandemic and those of the so-called frugal countries. Instead of countries putting more money from their national coffers into the European Budget, the EC plans to finance itself with new “green” taxes that could raise annual revenues of €5-14 Bn for the EU.