MADRID | By Ana López-Varela | “The OPEC will not cut production even if the oil barrel drops to $20.” The intentions of the Saudi Oil Minister, Ali al Naimi, are stark. But, how will the OPEC’s decision of maintaining the production quota at 30 million barrel per day affect the markets? And which are the forecasts that market watchers have regarding the oil? In general, they expect the prices to increase. However, futures traders remain more conservative.
MADRID | The Corner | The ECB’s non-conventional measures, the banking restructuration and the adaptation to the new regulation make 2015 a crucial year. According to experts at Morgan Stanley, the many stories about restructuration, dividends and regulatory changes will allow to differentiate the performance of the different assets.
MADRID | The Corner | It was expected that the fall in the oil prices would have an impact on the Spanish CPI, and that is what has happened. The CPI dropped by six tenths in December with respect to the previous month, while it reduced its interannual rate by seven tenths to -1.1%. This fall is the result almost exclusively of the decline of the oil price, whose fluctuations represent more than 50% of the variability of the Spanish inflation.
ZURICH | UBS analysts | We review some of the key Eurozone developments of 2014, and look ahead to 2015 and beyond. Eurozone growth has disappointed in 2014, mainly due to Germany, France and Italy. Economic performance over the coming months is likely to remain subdued, given various risk factors, which are likely to weigh on sentiment.
MADRID | The Corner | Greece’s prime minister failed to get his presidential candidate confirmed, which will lead to an early parliamentary election that could end the nation’s international lifeline. It was important that the Greek government reached an agreement to appoint a new PM. However, the third and decisive time only gave 168 votes to Antonis Samaras, the same as in the previous round. This means that there will be early elections and the possibility of Syriza reaching the government is even closer.
MADRID | The Corner | The Japanese government approved last Saturday a new stimulus program to inject up to ¥3.5 billion (€23.8 billion or $29.1 billion), which will help the less developed regions of Japan and the households with subsidies, vouchers for goods and other similar measures. The government of Japan expect this new stimuli plan to boost the GDP by 0.7%. Despite the many critics to the so-called Abenomics program, the measures are still on-going as the advisor to the new government William H. Saito explained in an interview for The Corner.
By Franceso Saraceno | Where [President of CESifo Group Hans-Werner Sinn and I] disagree is on how to trigger the demand-driven boom. Mr Sinn expects this to happen thanks to market mechanisms, just because of the reversal of capital flows that the crisis triggered. He argues that the capital which foolishly left Germany to be invested in peripheral countries, being repatriated would trigger an investment and property boom in Germany, that would reduce German’s current account surplus. This and this alone would be needed. Not a policy of wage increases, useless, nor a fiscal expansion even more useless. Problem is, the data speak against Mr Sinn’s belief. Since the crisis hit, capital massively left peripheral countries, and yet this did not fuel domestic demand in Germany.
BANGALORE | By Srikanth Vasuraj | Coming from a non-believer this is a big change when I say that I am actually glad that Mr. Narendra Modi has taken over the helm in India. He comes across like a breath of fresh air, speaking the language that people of India have been dying to hear for a long time. This is probably one of the reasons why he won with such a huge mandate. But now that the dust of elections has settled and having been in the hot seat for around six months, the honeymoon period is over and people are eagerly looking forward to delivery on all those promises. The people of India have delivered. Now its his turn.
MADRID | By Fernando Barciela | Last year, according to the World Investment Report 2014 by the UNCTAD, Spain received more foreign direct investment (FDI) than countries as the United Kingdom, Germany or Holland: up to $39,167 billion (52.4% more than in 2012). Who are boosting the investment activity? The so-called vulture funds are the ones that first noticed Spain’s “possibilities”: Lone Star, Cerberus, Burlington, GreenOak, Colony, Fortress or H.I.G –most of them North Americans.
SHANGHAI | By Qi Bing via Caixin | The smooth opening of the Hu-Gang Tong, the Shanghai-Hong Kong bourse linkage, marked the entrance of the Chinese capital market to a new era and was a major global event. It follows on progress China has made in opening up its markets after joining the World Trade Organization, and will hopefully greatly boost the country’s economic and social reforms in the years to come.