LONDON | The direct costs of a Greek default and exit would appear controllable after all, analysts at Barclays Capital noted in a report to investors on Friday. But for all the sense markets are supposed to instil into State finances and economic policies, as their champions tirelessly tell everybody, emotion accounts for an awful lot. Let's say, for instance, that yes-all right, Greece's new government would be formed by…
Morgan Stanley brought up on Friday a clear graph on banking cross assets funded at the European Central Bank liquidity facility or the emergency liquidity assistance tools. One of the conclusions, analysts said, is that “only Greece has experienced a strong bank deposit outflow this year, although it is wo relationship advice rth noting that in Spain and Italy internal capital flows occur, too, towards the soundest and biggest banks.”…
Julia Pastor, in Madrid | In a note to investors, Afi’s analysts affirmed on Thursday that German CDS or swap contracts for bond buyers to protect themselves against losses have been under pressure in the last weeks, consequently increasing by 20%, the most among the euro zone’s countries. “It means a change of credit risk perception about Germany, which could be anticipating, as it happened in July and August of…
The International Air Transport Association published this week April data, which confirmed that there has been a certain slowdown on the overall still growth picture. From January to April, world air traffic was up by an accumulated 7.1 percent versus 7.4 percent in January to March. Emerging markets like Latin America, Middle East and Africa registered double-digit growth, while the down trend was worse in the US than in Europe.
LONDON | While the European Central Bank and the Spanish government argued on Wednesday about the best mechanism to salvage Bankia, Caroline Keen, a member of the team managing the Newton Asian income fund at investment house BNY Mellon, said euro crisis contagion was rapidly developing elsewhere, too. Keen warned that economic headwinds from the euro zone were likely to affect the Asia-Pacific ex Japan region for the remainder of…
MADRID | Utter disarray might sound a mild and tender description for the knock out effect BANKIA crash landing has inflicted on Spain’s credibility. Only a few days ago, the government downsized the issue to a trifle €7 billion support. The bill runs now at €24 billion, with the prospect to rise still higher. Spending such a huge pile of money doesn’t stand as the most worrying fact. After all,…
MADRID | A few weeks ago, the Spanish government adamantly denied any hint on disbursing a single penny in banking sector support. A few days ago, it acknowledged the necessity to do just the opposite for anchoring ailing entities. In a desperate face saving attempt it discarded such a funding might lead to open aid, support being provided at a punitive 10% interest rate. But BANKIA discomfiture has led to a…
LONDON | Barclays Capital asked 80 of their fixed income clients about what the European Central Bank should do to calm markets down and deflate the ever more acute euro crisis. Investors from outside the euro zone said the central bank’s best chance would be to return to the markets to buy sovereign debt from Italy and Spain, cut interest rates and inject long-term liquidity into the banking system, but…
LONDON | Contagion is an easy-to-spot force. The German stock market DAX 30 Index has since late March declined by 9.2% in euro terms, in an environment where the broader continental market, as represented by the MSCI Europe Index, has fallen by 10.6%. For mere market observers, this drop has followed a period of very strong performance earlier in the year, particularly two months ago, so perhaps a degree of profit-taking…
By Carlos Díaz Guell, in Madrid | May 15, in Madrid, was bank holiday in commemoration of its saint patron San Isidro. But the stock market was opened. The IBEX 35 closed that session at 6,700 points, ranking at September 2003 levels. Drawing on the daily exchange rate of that day, the drop so far this year (fall, thud, even crash if the readers would rather use a harsh word) has been of 22.27 percent and over 53 percent from November 2007. The…