The Corner | April 17, 2015 | ECB’s Vice President Vitor Constancio put things into perspective by pointing out that Greek banks’ exposure to Greek sovereign bonds is much smaller than other banking sectors’.
BRUSSELS | April 17, 2015 | By Alexandre Mato | Spain, Italy, Portugal and Greece are under the European watchdog scrutiny because of the fiscal rules applied to the current Deferred Tax Assets (DTAs) framework. If proven illegal state aids used to bolster capital ratios, banks would suffer a big bite (4-5%) on their capital levels. However, legislators and the Economic Committee Secretary have admitted to The Corner that they doubt the DTAs investigation was launched due to MEP concerns.
Known as the BRICS bank, the Asian Infrastructure Investment Bank (AIIB) wants to become an alternative to the IMF and the World Bank. The initiative led by China adds to Beijing’s ambitious project of recovering the ancient Silk Road. So far, more than 40 countries from the five continents showed their support, proving China’s growing –and controversial– global influence.
The Corner | April 14, 2015 | On Wednesday’s press conference, Mario Draghi is likely to indicate that ECB QE has got off to a good start operationally and price action terms in the market. Barclays analysts think cautious near-term trading is required in EGB spreads, given poor liquidity and lingering Greek worries.
The Corner | April 14, 2015 | At first sight the Spanish Ibex multiple does not seem particularly stressed (16.2 x PE 12 months forward with a premium of 15% against historical series). But analysts believe that it is actually being affected by optimistic earnings estimates, especially in the banking sector.
The Corner | April 12, 2015 | Earnings season is warming up on Wall Street. During the week the major US banks will present their results (tomorrow, JP Morgan and Wells Fargo), which will impact the course of American stocks in the short/medium term. Should US companies show a pessimistic picture with their 1Q earnings, that would mean the US economy is in worse shape than predicted. But are these expectations part of a wider game?
The Corner | April 11, 2015 | It’s not just the Nikkei beating historic records: European equities continue to benefit from tail winds thanks to the low euro and improving macroeconomic figures. In the past week, climbs ranged from a shy + 0.10% on the Spanish Ibex, to a much stronger + 0.54% on the German DAX, representing a record for the index. The British FTSE rose by + 0.35%.
The Corner | April 10, 2015 | Deutsche Bank is looking to clean up its image and may soon come to an agreement that draws a line under its involvement in the Libor scandal. As first reported by The New York Times, the German bank could be about to come to an agreement with the U.S Justice department. Financial supervisors admitted to The Corner that not enough has been done to eradicate bad practices.
MADRID | April 9, 2015 | By Francisco López | The flurry of good news on the Spanish economy in an election year should be treated with caution. This week the Spanish Treasury placed Treasury letters at negative yields for the first time ever. However it should also be noted that half a dozen European countries have reached this level already and that the driving force behind the historical lows is undoubtedly the ECB’s QE programme.
MADRID | April 9, 2015 | By JP Marín Arrese | As the recovery pace of the US economy softens, FED policy makers are growing increasingly reluctant to raise rates too early. The March FOMC minutes released yesterday reveal they could only agree on deleting “patience” when referring to the foreseen tightening of the monetary stance. Members seem split on the timing, with many openly advocating postponing the move until the end of this year or even into 2016.