The Corner | June 1, 2015 | Italian risk premium (136.5 bp) should probably come down and be lower than the Spanish one (135 bp) this week despite PM Matteo Renzi’s set back in the country’s regional elections on Sunday, experts at Bankinter commented. (Chart above: Italy Generic Govt 10Y Yield by Bloomberg.)
LONDON | June 1, 2015 | By Sigrún Davídsdóttir | Austria was one of the eleven founding members of the Eurozone in January 1999, but the Austrians never quite put their money where their mouth was: Austria is the only euro country where households flocked to take out foreign currency loans. About three quarters of these loans are coupled with repayment vehicles.
LONDON | May 30, 2015 | Cristina Marzea (CFA) | All the buzz these days is about digital banking: will banks lose business to disruptive entrants, or will they fight back and embark on a massive digital revolution which will see the branch concept become obsolete. Not all EMs are the same – this refers to levels of bancarisation, credit penetration, technology and mobile adoption, as well as the competitive banking landscape that shapes where each banking market is in the technology cycle.
MADRID | May 29, 2015 | By Miguel Navascués | Fortunately the case against the the preponderance of finances over the rest of the economy is gaining traction, as I recently argued here. As usual, FT’s Martin Wolf hits the mark.
Barclays | The ECB’s April data on monetary aggregates and bank balance sheets show a surge in money growth, but bank lending dynamics is still subdued and the annual growth rate of loans to the private sector (adjusted for sales and securitisations) remained at 0.8%
Iris Mir | China continues to struggle to avoid being swallowed by the challenges that stifle its stagnant economy while developing a new monetary policy. The IMF applauded the steps taken so far and no longer considers the RMB an undervalued currency. However China remains too cautious in its monetary reforms. Risking the country’s ambitions of further internationalize the RMB and the joining of IMF’s cherished Special Drawing Rights Basket.
BEIJING | May 27, 2015 | By Caixin Editorial Team | Emerging economies have been bracing themselves for a rise in U.S. interest rates. Last week, the release of the minutes of the Federal Reserve’s policy meeting in April sparked another round of speculation about when the rate hike might begin. Most now expect a start date in December, rather than September.
LONDON | May 27, 2015 | Barclays | Even if a last-minute agreement was negotiated on a technical level, the implied U-turn on election promises would likely push the Greek government into some sort of political crisis, forcing a change in the current set up.
May 25, 2015 | By Benjamin Cole via Marcus Nunes‘Historinhas | The International Monetary Fund on May 22 badgered the Bank of Japan to adopt a more aggressive growth stance, even though the island nation posted Q1 real GDP growth of 2.4%, and an annual inflation rate of 2.3%—along with an unemployment rate of 3.4%.
BEIJING | May 24, 2015 | By Zhang Yuzhe, Huo Kan and Xing Yun via Caixin | A bond program that takes aim at China’s local government debt problem could raise 1 trillion yuan, yet cut creditor yields.