The housing bubble, like the turbid monster of an old movie, blows in time and again. Didn’t Spain’s president Mariano Rajoy see it coming? Standard & Poor’s Rating Services might have opened his eyes when it lowered its long-term sovereign credit rating. The Kingdom of Spain woke up on Friday under the ‘BBB+’ tag from the previous ‘A’. The risk agency did not just cut down the short-term sovereign credit rating to…
International Financial Analysts AFI in Madrid added their opinion in agreement with more or less everyone else: the mix of relaxed monetary policy, fiscal retrenchment and depreciation of the sterling pound that has been engineered in Downing Street by the Coalition government isn’t working. In fact, AFI said the UK’s is the economy with the weakest recovery response against the crisis among the main developed economies. As the Bank of…
Although the difficulties that the Spanish small and medium sized companies experience to access finance showed signs of very soft relief, the figures were bad. The latest survey on SMEs in the euro zone offered a stark picture of small companies in Spain suffering the worse end of the credit crunch, as a consequence of a weak domestic market. In contrast, Spain’s corporations are able to weather the crisis thanks…
MADRID | The German Treasury placed Wednesday €2.4 billion in 30-year bunds with an average return of 2.41%, down from 2.62% in the previous auction. The bid to cover dropped to 1.1 times from 2.1 times. Berlin admitted that demand had been lower than expected, and the total sale volume planned had been left uncovered. In a note to investors, Citigroup in Spain commented on the German explanations and made an interested, interesting comparison: “This reflects a context of volatility and uncertainty, but more importantly, the…
NEW YORK | Last November, the U.S. dealt with their biggest municipal bankruptcy in their history: Alabama’s Jefferson County, on the south of the Appalachians, filed for the so-called Chapter 9 after government officials and creditors (among them are JPMorgan and Bank of America) failed to set an agreement on the more than $3 billion in sewer debt. Jefferson county is not alone. More municipalities have been suffocated by debt since…
MADRID | The Dutch coalition collapse coupled with the plausible fiscal pact rebuke following the poll outcome in France has severely undermined investors’ confidence. Trust on discipline driven governance in the euro zone is crumbling. Losing in a row two key stalwart bastions of tough budgetary rules has sent shivers to the markets. Further challenges are expected to materialise as the austerity overdose dents popular support for governments at pains to…
By Tania Suárez, in Madrid | Fernando Luque is editor and analyst at Morningstar. In a conversation with The Corner, Luque remarked that it is difficult to know whether the Spanish Ibex has already reached bottom, and added that long-term investments at current market prices seem more interesting. Wolfang Münchau wrote in the pages of the Financial Times that if Spain can’t reach the deficit target, it will be bad and if it…
BNP Paribas’ brokerage house Cortal Consors warned about market distrust and the contagion effect over the region after the Argentine government made the announcement this week of the nationalisation of Repsol’s subsidiary YPF. In Friday’s strategy note to investors, Cortal Consors analysts said market participants fear other countries in the Latin-America area could follow the aggressive policies of Argentina’s president Cristina Kirchner, who is since her re-election trying to stop capital outflows…
LONDON | The latest Spanish financial turbulences are unlikely to start a new downturn for risk assets appetite, Skandia Investment said in a market commentary on Thursday. The investment management company believes that the recent weakness in Spanish bonds, although may become a new phase of the euro zone debt crisis, should not affect equities and other risk assets. Rupert Watson, head of asset allocation at Skandia Investment Group, remarked that…
LONDON |The European economies are likely to continue being a significant source of volatility as disagreement within the European Central Bank inhibits its ability to put the region on a firmer footing, Standish said in a report published Thursday. The fixed income specialist for BNY Mellon made the observations in its April Outlook, by the global macro strategists at the firm. The conflicting viewpoints of members of the ECB’s governing council…