Acting as an “agent provocateur”, Catalonia’s government intends to hold a wholly biased and unrepresentative independence referendum in early October. It knows the outturn will hardly attain half of the potential voters, as only a minority of the population favours an outright split from Spain.
FCC is an (ex) domestic construction company that moved into Environmental Services & Water management. It is not alone in embracing new business models including Sacyr, ACS and Acciona, which moved from a domestic construction business model to respectively an international concession one, an international civil engineering one and an international electricity generation one, while Royal BAM partnered with PGGM to grow in the PPP area and Bilfinger shifted to industrial services.
J.L.M. Campuzano (Spanish Banking Association) | The current strong recovery of Spanish housing market has re-opened the debate about its sustainability. Some figures could support it is. According to last Bank of Spain’s data, the net wealth of the Spanish families is rising at 6.9% on a y-o-y basis. It currently exceeds 119.4 % of GDP. As regards to housing wealth, it now means 420% of GDP. Also a better financial position of families with a debt level at 63.4 % of GDP very near the European average.
While stability of global liquidity is key to growth for both emerging and developed markets, the Global Financial Crisis (GFC) changed the role and influence of its key drivers. A paper by Bank of International Settlements’ Stefan Avdjiev, Leonardo Gambacorta, Linda S. Goldberg and Stefano Schiaffi, defines the main components of global liquidity as cross-border bank loans and international bond issuance, distinguishing also between local (pull) and global (push) factors. AXA IM experts have summarised this work.
Pablo Béjar | Having transitioned into a more complex global economy, today emerging and developing countries are less economically vulnerable than in the 1980s and 1990s. But how secure are these economies? How much less vulnerable quantitatively and more resilient are countries to macroeconomic crises that battered them over the last 35 years? More specifically, how has the probability of a currency and GDP crisis evolved during these last years?
Richard N. Cooper via Caixin | In 2013 President Xi Jinping announced the Belt an Road initiative to create a new Silk Road, by land and by sea. The sea route has been well-established since the Suez Canal opened in 1869, but modernizing land routes will be much more difficult, both in engineering terms and especially in economic terms.
Many important assets have been trapped in broad trading ranges in recent years despite substantial political upheaval Some examples are the US Treasury 10-year yield which moved between 1.5-2.5% for 3 years or the German Bund 10-year yield between 0-1% for 3 year. According to BoAML, “this inability of yields, the US dollar & volatility to break out reflects the inability of the economic cycle to generate strong growth & inflation.”
Nick Ottens via Atlantic Sentinel | A year has passed since Britain voted to leave the European Union and huge questions remain unanswered. For example, what’s going to happen to Britain’s £700 billion trade with the EU? or how many planes will be allowed to fly across the Channel once Britain exits Europe’s open-skies regime?
In last years, central banks have managed to give markets any sign about the direction of their policies, neither too dramatic nor excessively inaccurate. Today it is the turn for the ECB to take a further step towards the monetary policy easing in Europe. Experts are divided over the tone of Draghi’s words at the central bank meeting. Some expect he will not change it against the relative surprising hawkish speech in Sintra two weeks ago.
The reflation trade that boosted a rally in global stockmarkets after Donald Trump’s victory has been put to the test in recent weeks with the inflation data failing to deliver the sought-after hard facts. However, commodities as an asset class have for some time been somewhat isolated from the reflation debate