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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.
china

World economy 20th December 2014

China bans its own national anthem

By Ray Kwong | When it comes to putting the kibosh on things, the folks at Zhongnanhai (China’s version of the White House) have few peers. In recent memory, China has seen fit to ban puns, long beards, zombies, American pork, British cheese, clams from Alaska, Islamic-style clothing, TV programs that feature one-night stands, April Fools jokes, Bitcoin, film stars who use drugs or pay for sex, Windows 8, smoking in public places, the entire Muslim holy month of Ramadan, and the “The Big Bang Theory.”

And that was just this year.

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Spanish economy 19th December 2014

Spanish tariff deficit “no longer a source of concern for investors”

MADRID | The Corner | The Spanish Council of Ministers has approved the definitive figure for the 2013 tariff deficit. The figure, €3.54 billion, will be recoverable via the electricity tariff over a period of 15 years. It will be remunerated at 2.195% of interest rate. The measure will have an impact on the main utilities that operate in Spain: EDP (Ba1 p, BB+ e, BBB- e), Enel (Baa2 n, BBB e, BBB+ e), Gas Natural Fenosa (Baa2 e, BBB e, BBB+ e) and Iberdrola (Baa1 n, BBB e, BBB+ e).

interrogacion recurso TC

In Europe 18th December 2014

Greece: The one question Syriza needs to answer

ATHENS | By Yiannis Mouzakis via  MacroPolis | With the coalition in Greece getting only 160 votes for its presidential candidate in the first ballot, falling short even of the most conservative estimate, based on the currently available information it seems that the number of deputies that will vote in favour in the third round on December 29th will not reach the minimum 180 required.

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In Europe 18th December 2014

Russia represents 1.1% of Spanish exports

MADRID | The Corner | The Russian market represents a low proportion of the Eurozone’s goods exports: below 3% for the major economies. In the case of Spain, the percentage is just 1.1%. According to experts at Afi, a decrease in the amount of Russian tourists arriving in Spain could have an impact on the Spanish economy. After all, its current contribution to the sector is just (2.4%), but before last summer, Russian tourism was a spur to Spanish tourism. 

Fed

World economy 18th December 2014

Fed’s baby steps towards tightening

MADRID | The Corner | Janet Yellen spoke about patience in judging when to raise rates on Wednesday, which means no hikes for at least two meetings. The change in guidance was played down by the FOMC statement. BNP Paribas analysts thinks the US central bank wants to prepare markets for hikes but at the same time reassure them. They call for the first hike in September. 

No Picture

World economy 18th December 2014

A buying opportunity in EM equities?

ZURICH | UBS analysts | It is too early to buy Russian equities in our view. The failure of the Russian Central Bank to ‘back up’ yesterday’s aggressive rate hike with enough intervention to stabilize the Ruble means currency and market risk is likely not over. The Russian market needs the oil price and the Ruble to bottom out for a sustained rally to begin. MSCI Russia trades at just over 3x forward earnings (v. a long term average of 7.2x), but this is based on a consensus EPS forecast for 2015 of -1% – almost certainly far too high.

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In Europe 17th December 2014

Greece: Where did it all go wrong?

ATHENS | By Nick Malkoutzis via MacroPolis | When Greece returned to international bond markets in April this year after a four-year exile, it was trumpeted by Prime Minister Antonis Samaras as another step towards the crisis exit door. “Confidence in our country was confirmed by the most objective judge – the markets,” he said after investors snapped up three billion euros of five-year bonds with a coupon of 4.75 percent. Exactly seven months later, though, the yield on those bonds shot up to almost 10 percent. Suddenly, the markets do not seem so confident. So, what went wrong? 

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Markets 17th December 2014

How would broader ECB QE impact the UK?

LONDON | UBS analysts | UBS expects the ECB to widen its asset purchase programme to include corporate, parastatal and sovereign bonds on 5 March 2015. Our base case is for €1 trillion of sovereign bond purchases to be undertaken over a two-year time horizon. In this note, we examine how a broadening of the ECB’s QE programme is likely to impact the UK economy and sterling-denominated asset classes.

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Spanish economy 16th December 2014

Inflation in Spain: Negative territory for 5 consecutive months

MADRID | The Corner | Spain’s final CPI in November was exactly the same as preliminary estimates: -0.4% yoy and -0.1% per month. The inter-annual rate has registered its fifth month in deflation, whereas the month-on-month rate was recorded as negative for the first time in 4 months. Throughout 2014, there were only three months with negative rates. Both the acceleration of the fall in oil prices and the stability of the dollar/euro explain these figures.

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World economy 16th December 2014

Abenomics: “Third arrow” as a necessary condition for trickle-down effects

LONDON | Barclays analysts | The post-election challenge for Abenomics will be how to promote a transition from a favourable turn in expectations to the real economy (real GDP). For example, JPY depreciation has boosted earnings and led to an improvement in business sentiment (expectations), but export volume remains sluggish, suggesting it has not given a boost to the real economy (real GDP).