From stable to negative. Moody’s new rating for Europe puts the continent on notice and made some European stock markets slip on Tuesday. According to the agency, Germany, France, the UK and the Netherlands could stop fulfilling their obligations to the EU if the crisis worsens. These four countries account for about 45% of the EU’s budget revenue. “The creditworthiness of these member states is highly correlated, as they are…
LONDON | Ratings agency Fitch released on Monday the conclusions of its latest survey of the opinions of a hundred fixed-income asset managers with an estimated $7.2-trillion business volume. More than 80% of respondents work at the top 20 and 50 investing houses in Europe, so their views on the euro zone’s future are meant to be telling. And they are: fiscal integration is seen as the final station of…
LONDON | This tells investors something about the scarcity of cash and quality assets to support compensation activity outside the regulated stock markets: from Friday CME Clearing Europe, the London-based clearing house owned by CME Group, has extended the range of eligible collateral types to include gold bullion. It is supposed to make it easier for holders of financial derivative products to offload their portfolios, and so prospective buyers would be more willing to…
By Tania Suárez, in Madrid | Fernando Luque is analyst and editor for Morningstar. In a conversation with The Corner, he said that Greece will not withdraw the euro because “that possibility is no good for anybody, neither for Greece, nor for Germany.” Luque explains that there are no shortcuts to solve the Greek crisis, but that will not necessarily damage other peripheral countries such as Italy or Spain. Question.-…
Hundreds of thousands of retail investors may share an uncomfortable feeling these days, that of being trapped under their holdings of what once was commercialised as ‘patriotic bonds’. Unloading them is proving a difficult task. While most sovereign and sub-sovereign debt securities in the secondary market move millions of euros, daily trade volumes of short-term paper issued in 2011 and 2012 by Spanish regional governments rarely reach the modest figure of €50,000….
By Tania Suárez, in Madrid | Alberto Matellán is director of strategy and macroeconomics at Inverseguros SVB. In a conversation with The Corner, he said that even if Spain doesn’t formally request a bailout, “it will be necessary some kind of intervention.” However, he points out that the possible Spailout would be met via different instruments, and that there is a high probability that a bailout for Italy comes in…
BEIJING | Guan Jianzhong, chairman at Dagong Global Credit, defends the independence of his ratings agency against the US-biased most powerful financial grade houses. Which are the differences between Dagong and its Western rivals: Moody’s, Fitch and S&P? We are essentially different. In the case of these three agencies, they try to protect US interests. The standards they use are the result of their views and values accompanied by a…
By Tania Suárez, in Madrid | Víctor Rodríguez is an economist at CMC Markets Spain. In an interview for The Corner, he said that Mario Draghi’s role is not so decisive in the debt crisis, although we could see important measures being applied by the European Central Bank. Regarding a possible bailout for Spain, Rodríguez considers that “if the country asks openly for it, the most likely reaction will be…
Yields on Italian 10-year bonds will keep under tension after the latest economic data brought investors a negative surprise. The country’s GDP suffered a further contraction of -2.5 percent year on year in the second quarter of 2012: the previous figure had been -1.4 percent and market expectations had pointed at -2.3 percent. Industrial production played a major role, with a -7.9 percent year on year rate that was 2.4…
By Miguel Ángel Rodríguez, analyst at XTB, in Madrid | Midsummers have often been marked by markets’ most abrupt movements and scares that have hit unaware investors. This year, it wouldn’t be the first time I saw traders and asset managers cut short their holidays because their positions, once so safe that were left open, have stopped being as secured as they believed. Just skimming through the salmon papers, in…