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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.
Cryptocurrencies turn ten years; 2019 could be the year of tokenization

Markets, World economy 11th May 2020

Bitcoin Halving: It’s Finally Here¡

Simon Peters (eToro) | This week, the Bitcoin block reward halving will happen, possibly as early as today. We don’t know the exact date and time as it happens automatically after 210,000 blocks are mined rather than a defined date and time, but if you want a New Year’s Eve style countdown, check out Bitcoinblockhalf.com I’ve covered the technical details of halving in previous newsletters, so I won’t go over them again. The important thing to note is that the block reward to miners will halve from 12.5 BTC to 6.25 BTC, hence the name of the event.

US jobs

World economy 11th May 2020

US jobs: Steepest Monthly Drop Since The 1930S Depression

Janwillem Acket (Julius Baer) | After initial jobless claims topped 33 million since 12 March, US labour market statistics for April showed massive job losses. As was to be expected, the usually cyclically robust services were a major source for redundancies, because they particularly suffered from the lockdown measures. However, there are reasons to expect that April 2020 could mark a low as fiscal and monetary incentives, next to a relaxation of the lockdowns, are prone to start a rehiring wave again.

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

European economy 11th May 2020

ESM Credits, No Conditionality Now But What About In The Future?

Intermoney | On Friday, the first support measures within the EU worth €540 Bn were given the final go-ahead, but there are still some clouds around. There is a general requirement for accessing these loans for all countries, linked only to their use for direct or indirect Covid-19 health costs. There is no particular conditionality. In Italy, however, there are concerns about the conditionality of ESM resources in the future. If the recovery allows it, the conditions would already be a reality in 2022 at the latest.

Holland tunnel entrance at NY

World economy 11th May 2020

Infrastructure Spend a Key for Pandemic Recovery

Anthony Pettinari (Citi GPS) | While we can’t rule out that funding for infrastructure will be included in a new package, it looks far more likely that any package that can be agreed on by the Administrationand Congress will include more money for small businesses, the unemployed, hospitals/health care, and possibly State/Local governments. The good news though is that we expect a post-election comprehensive infrastructure bill that could help propel beaten down state and local economies.

1008p2 Wall Street sign Main i

World economy 10th May 2020

US Stocks To Be Relative Winners In A Post-Covid-19 World

Patrik Lang, Head Equities (Julius Baer) | We have downgraded eurozone equities to Underweight given slower earnings recovery expectations, increasing political risk and unfavourable sector exposure. In our view, relative valuations do not fully reflect these negatives. On the other hand, we have upgraded US equities, which should benefit from a relatively fast post-Covid-19 recovery.

inflation course

World economy 9th May 2020

Be Aware Of What Inflation Really Is

Degussa | Most people these days think inflation is a rise in consumer goods prices of more than 2 per cent per year – a result of what mainstream economics has been teaching generations of students all around the world. However, equating inflation with changes in consumer goods prices is inadequate and highly deceptive for various reasons. 

ECB Bundesbank

European politics 8th May 2020

The ECB Responds Without Hesitation To German Constitutional Court Ruling But Must Build Bridges

Intermoney | In the name of the ECB independence, Christine Lagarde, made it clear that the only guide for the institution is the fulfilment of its mandate and no resources or efforts will be spared in this task. Once the central bank has made it clear that it does not accept the authority of the German courts, it must move on towards a more political phase in which it can build bridges and provide a solution to the problem. If it does not do so within three months, the Bundesbank could find itself in a difficult legal mess.

pallete telefonica

Ibex, Markets 8th May 2020

Telefónica And Liberty Global Team Up In The UK, Becoming The Strongest Supplier In The Country

Telefónica has finally reached an agreement with Liberty Global to merge its UK businesses, O2 Holdings and Virgin Media UK respectively, and form a 50/50 joint venture. The merger would make the new group the UK market leader with a 34% market share compared to BT’s 32%. This integration is the largest transaction in Telefónica’s history. Whatsmore, it will always be remembered for having happened in the midst of the restrictions determined by the confinement in the two countries.

Spanish Banks precious

Spanish economy 8th May 2020

The Bank Of Spain Urges The Government To Adopt A Strong Fiscal Response To Avoid Extending Covid-19’s Impact

Following the publication of the Financial Stability report, Bank of Spain governor Pablo Hernández de Cos highlights the significant increase in public debt, which will have to be faced once the crisis is over. The governor points out that it will be necessary to implement a medium-term fiscal consolidation programme and implement the necessary structural reforms.

UK 777x400

European economy 7th May 2020

BoE Chooses To Wait In Face Of Uncertainty

David Page (Head of Macro Research at AXA Investment Managers) | The Bank of England (BoE) today announced its monetary policy decision for May. It left the Bank Rate unchanged at 0.10% as widely expected, by unanimous vote. It also left QE unchanged, leaving the Asset Purchase Facility target unchanged at £645bn. This was in line with the median consensus forecast, but we had expected a £100bn increase in QE today as the current programme is set to expire in early July. This was by split decision, with two members voting for an immediate £100bn increase. The majority of the Committee decided to wait for “more information… that was likely to become available over the coming weeks”, but these members “all” acknowledged prospective weakness in the economy and downside risks to the medium term outlook “might necessitate further monetary policy action to support the economy in the future”. We fully expect the MPC to increase QE, probably by £100bn at its next meeting on 18 June.