Nick Malkoutzis | Things are so bad in the European Union that officials are using two Greek words, not just one, to describe it: “polycrisis”. This was the phrase used by European Commission President Jean-Claude Juncker in an address to the Hellenic Federation of Enterprises (SEV) in June.
BoAML | We believe that nominal US rates are biased lower heading into a period of policy uncertainty including the US Presidential contest, European elections, and continued negotiations over Article 50. We continue to think that there may be a re-pricing of uncertainty premium over the next month.
Spanish think tank Funcas said this week it forecasts an average annual inflation rate in Spain of 1.5% in 2017, although it is feasible that this could reach 2% in one month or other during the first half of next year due to factors like the uptick in oil prices.
Ahmed Ezzeldin | Since oil prices plummeted from around $100 a barrel in mid-2014 to $50 in September 2016, the fiscal crisis of Saudi Arabia has deepened further. These signals point in one direction: The golden days of the generous Saudi state might be coming to an end.
If demographics fail, the economy doesn’t grow and employment stagnates, then there is no difference at all between the pay-as-you go system (Spain’s current state pension system) and the capitalisation scheme (put forward as a miraculous solution, now used in private pension schemes), says expert Niko Garnier.
The financial world can also become the best scenario for a real thriller. While movies use cemeteries and psychiatric hospitals to cause panic, finances can make markets shake with low interest rates, the volume of global debt and the size of the Eurozone’s banking industry.
Today Mariano Rajoy has been sworn in as Prime Minister after Saturday’s investiture session. He obtained a simple parliamentary majority with 170 votes in favour, 69 abstentions, 111 votes against and 1 absentee. So at last the period of uncertainty which had lasted since December 2015 is over.
Spain’s seven big banks registered net profit of 10.2 billion euros in the nine months to September, up 4.4% from a year earlier. Against a backdrop of low interest rates, corporate transactions have distored the banks’ global earnings.
The yield differential between the Italian and Spanish 10-year bonds has risen 21 basis points since the start of September and stands at around 34 basis points. We expect a recovery in the differential, which will be gradual and limited to 50-55 bps, up until Italy holds its referendum on constitutional reform.
Carax-Alphavalue | Amongst integrated oil companies, Repsol (Add, Spain) is one of the smallest with a €19bn market cap despite its latest acquisition (Talisman) doubling its size (production seen at 725kbpd by 2020 from 355kbpd in 2014).