Israel Rafalovich | In the last few days a saying has frequently been heard in the corridors of the European Commission: “Spain is not Italy. With the new Spanish government it is now a Spanish spring.”
The Swiss population has rejected in a referendum on Sunday, with 74% of votes against, the popular proposal that would have limited the “creation” of money only to the National Bank of Switzerland.
The ECB could announce a short taper to December current week. The central bank has to be consistent if QE is ending this year and, hence, according to BoAML’s analysts it has to send a reaffirming message on three criteria: convergence, confidence, resilience.
Carlos Arenillas | On June 10 there will be a referendum in Switzerland, something which is quite usual in this confederate State. But this one is particularly interesting. In this country, famous for its banks, the citizens will be consulted on a very sensitive issue: money.
The sudden finding last week that Deutsche Bank’s operations in the US would need to be cut back as the Federal Deposit Insurance Corporation was worried about the bank’s local funds is disastrous news. The situation does not allow for a recapitulation of some kind.
The twentieth anniversary of the creation of the ECB coincides with renewed financial tensions in the Eurozone. According to Caixa Research, the irreversability of the single currency requires ambitious advances in the European project.
The potential upside of European shares is now an attractive +10% in AlphaValue’s valuations and +16% for the banks. The best upsides are in BBVA and Banco Sabadell, each with +40% on a 6-month horizon.
According to the economic press, Unicredit and Societe Generale have been studying their merger for months, but the political instability in Italy has caused this to be delayed. The combination of the two banks would create the third largest bank in Europe in term of market capitalisation.
Giacomo Bracci | The result of the latest Italian political elections has been interpreted by many observers as the outcome of deep, popular discontent. Recent developments in the country have also revived the possibility once again of an Italexit in the political debate of the entire euro area.
The situation in Turkey is a good example of the negative consequences of stances which call into question the independence and credibility of the central banks. Currently, the deteriorating credibility of Turkey’s institutions make it fairly difficult for actions like the increase in rates (last week they were raised by 300 bp) to attract capital flows.