MADRID | By Francisco López | Markets are taking for granted that ECB’s chairman Mario Draghi is going to act tomorrow. What is not that clear is to which extent he will do it. The last inflation figures on the euro area -a greater fall than the expected in May, standing at 0.5% and thus worsening deflation risks- represent a convenient opportunity for those ECB’s members claiming immediate bold measures.
MADRID | By Jaime Santisteban | Stock markets ended May trading high: +3.1% in Spanish Ibex 35 and +2.1% in EuroStoxx. We start a busy week for markets with all eyes set on Thursday’s ECB rate announcement. “The central bank is a slave of its own words and cannot afford to disappoint,” some analysts are pointing out.
ATHENS | By Manos Giakoumis via MacroPolis | The core Greek banks reported first quarter (Q1) results in the last three days of May. The release of the results was the last act in a series of important developments for the Greek banking market over the past two months. These developments constitute the third phase of the new era for Greek banks, which started two years ago.
MADRID | By The Corner | The importance of foreign investors in the Spanish stock market is increasing. Last figures proving it were released on Wednesday: more than 80% of volume traded comes from abroad, while 40% lies on non resident capital portfolios.
MADRID | By The Corner | As the Spanish sovereign bond is at minimums (2.8%) and the volume of debt has attained maximums (98%), Bankinter analysts point that low rates along with the large volume of issuances make European fixed income highly sensitivity to the risk premium ups and downs. High yield European firms are placing their bonds at historical minimum of 3.73%, when the average of the last 15 years is 10.19%. One of the risks the ECB is highlighting is the return of financial instruments that boosted banks’ leverage and resulted in the 2007 economic downturn.
MADRID | The Corner | The rise of the far-right Front National will harm more the European project than any economic recipe imposed from Berlin. In the end, Germany is indeed setting hard conditions for the EU integration, but at least is favoring it, whereas France’s Marine Le Pen has a clearly anti European speech and intends to bring power back to the countries.
MADRID | By Julia Pastor | The rise of nationalist political parties in the new EU Parliament “could tighten the euro, but only transitorily”, according to analysts at Bankinter, but the reality is that “from a practical point of view everything will remain the same,” experts at Link Securities say.
WASHINGTON | By Pablo Pardo | Criticism to the fine imposed by the United States department of Justice to Credit Suisse have been almost universal. For instance, The New Yorker’s John Cassidy has remarked that Credit Suisse’s CEO, Brady Dougan, has said that “we have found no instances where clients cannot do business with us,” as a proof of the lack of impact of the $2.5 bn. (EUR1.9 bn.) fine.
MADRID | By Jaime Santisteban | S&P has upgraded Spain’s credit rating for the first time since stripping the country of its AAA grade in 2009, increasing its assessment to BBB from BBB- and saying the outlook is stable. But ten-year Spanish bond yields stay at 3.004% following last week’s auction, while the U.S. benchmark 10-year note yield, was up 1.5 basis points at 2.550%, according to Tradeweb. A BBB player is getting more or less the same treatment in the market as a AA+.
MADRID | By Julia Pastor | Financial integration that will result from the European banking union will definitely help to reduce systemic risks and simplify an industry that deeply questioned during the crisis. Strengthening capital standards, as established in the Basel III framework, as well rethinking the role of the once ‘too big to fail’ entities are some of the regulatory changes, Governor of the Bank of Spain, Pablo Linde, explained in Madrid on Thursday.