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Markets 18th September 2014

EBC’s first TLTRO misses expectations

MADRID | By Julia Pastor | As expected, ECB’s September TLTRO will not make big headlines. 255 European banks borrowed €82.6bn of liquidity below consensus estimate of €100-150bn. Although the Frankfurt-based institution doesn’t provide a geographical breakdown, banks in Italy and Spain were among the leading borrowers (40% of the total) to trim funding costs. Spanish entities are thought to have asked half of those €30bn at their disposal, although some entities “are not willing to disclose how much they asked for,” an ECB source confirmed to The Corner.

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Markets 18th September 2014

Morning coffee: Scotland polls and TLTRO

MADRID | The Corner | FOMC’s conclusions (the Fed is renewing its pledge on low rates) meaning little changes to the current rates scenario, the spotlight has shifted to the Scottish independence referendum (final results to be released around 5:30-6:30 GMT on Friday), which is presumably going to have an impact on European financial markets today. Also the ECB is publishing the results of its much-awaited first TLTRO operation today. It’s the most important cheap cash offer from the central lender since the beginning of the economic crisis which has been very popular in Spain and Italy. Spanish banks will aim for €30bn, Economy Minister said on Wednesday.

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Markets 17th September 2014

Is state backing mezzanine ABS worth it?

MADRID | By Julia Pastor | ECB’s upcoming ABS drive with senior, higher credit quality assets will be launched with or without guarantees from the states, that is for sure. The question is if countries will guarantee riskier tranches, the so-called mezzanine ABS. Spain is willing to do so if others go for it, yet Germany, France and the Netherlands are refusing. This makes sense since a state back up would mean to put assets with uneven exposure to bankruptcy on the same level. An eventual agreement would be a very difficult political decision. Details of the ABS plan will be announced after the central lender’s next monetary policy meeting on Oct. 2.

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Markets 17th September 2014

Morning coffee: Fed decisions, UK jobs report and much more

MADRID | The Corner | What you need to be watching today: FOMC’s decisions, UK’s unemployment rate data, Eurozone and US CPIs. Also, ECB’s Mersch will speak in Hamburg.  European equity-index futures climbed buoyed by the important confirmation (269 votes in favour/ 244 against) of French PM Manuel Valls at the Parliament (Aa1 n, AA, and AA + e), only one month after he submitted the 2015 budget for the country and despite various rumours about a possible downgrade to Aa1 n by Moody’s this Friday.

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Markets 16th September 2014

Morning coffee: Germany’s ZEW, UK inflation, and much more

MADRID | The Corner | Don’t expect big changes in stock markets’ behaviour today: everyone is waiting for the main events of the week, that is, any move from the US Federal Reserve (FOMC meeting ends on Wednesday) and the Scotland referendum on Thursday. Just note that Germany is releasing ZEW index today, which gauges big investors and analysts’ confidence in the EU’s main economy. In the UK we’ll have consumer prices for August.

 

crowded elevator

Markets 15th September 2014

Elevator QE

SAO PAULO | Marcus Nune’s Historinhas- Guest Post by Benjamin Cole | If you ever farted loudly on a crowded elevator, then you know the reaction of most economists to the idea that national debts should be monetized through central bank quantitative easing (QE), aka “printing money.”

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Markets 15th September 2014

Santander’s governance deficit

MADRID | By J.P. Marín Arrese | Only a few hours following the death of former Santander chief Emilio Botín, his daughter Ana Botín was thrust into the spotlight as his replacement. This offered further proof -if it were needed-  of the firm grip on the Board of Directors which the family continues to hold. Its stake, reckoned to stand at less than 1%, has not prevented the swift transition from taking place.

Spain EPS revisions ratio

Markets 11th September 2014

Spanish 3-month EPS hits new all-time high

MADRID | The Corner | The pace of Global net EPS revisions has declined in August to -6.9% from -0.6% in July, although it is more significant the 3-month net earnings revisions that has improved from -7.9% to -7.0%, according to Hugo Anaya in his comment for JP Morgan. 

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Markets 10th September 2014

The ECB turns into a massive backstop

MADRID | By J.P. Marín Arrese | The ECB asset purchases drive has received staunch support from the financial markets. No wonder, as it turns the central bank into a huge and largely undemanding backstop. Under the covered bond programme, it will switch banking liabilities into fresh liquidity. The ABS purchases scheme will transfer loan portfolio exposure to the ECB. Overall, both measures amount to a solid backstop for redressing banking solvency. The move comes most timely, as stress tests and asset quality reviews are due shortly to be published.