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Spanish Banks

European economy 9th February 2023

ECB warns Spanish banks to be extra vigilant on defaults due to rate hikes

Divacons / Norbolsa | A total of five Spanish banks are in the ECB’s top 20 in terms of assuming lower capital requirements in what is known as Pillar 2 by 2023, according to supervisory data published yesterday by the ECB. According to Alphavale-Divacons, these are Kutxabank, Bankinter, Santander, Caixabank and BBVA. Kutxabank is the Spanish institution that has received the lowest capital ratio for this year in Pillar 2,…

ECB night

European economy, In Europe 8th February 2023

ECB more hawkish: risk of over-tightening seems overshadowed by risk of doing too little

On Monday we once again had statements from ECB council members after last week’s appearances following last week’s meeting. There are few novelties, except for the reaffirmation of similar broad movements for March. According to Committee member Robert Holzmann, inflation must be actively combatted until the citizens of the Eurozone feel that price stability is part of their daily lives. Holzmann did make an interesting point in explaining that the…

germany factory workers

European economy 7th February 2023

German industrial production falls by -3.9% year-on-year in December vs. -1.6% estimate and -0.5% previously

Banca March : There was a mixed bias in the German activity data released yesterday. On the one hand, factory orders grew by 3.2% month-on-month in December, accelerating the growth trend -the highest recorded by the indicator in thirteen months- and beating forecasts. The series is down, however, on a year-on-year basis (-10.1%), reflecting lower activity after the start of the war. In contrast, this morning we have learned about…

germany growth

European economy 6th February 2023

German factory orders rise more than expected in December, easing recession fears

CoM | German factory orders last December registered a 3.2% increase over the previous month, when they fell by 4.4%, thus surpassing market consensus expectations and removing fears that the “European locomotive” will enter recession this winter. According to data released by Germany’s Federal Statistical Office (Destatis), German factory orders experienced a 10.1% decline compared with December 2021, although they were 1.2% above the level recorded in December 2019, before…

green new deal

European economy, European politics, Relevant News Item 4th February 2023

EU seeks to emulate one of IRA’s advantages, simplicity of access, by streamlining green investment tax credits

Banco Sabadell: According to press reports, the EU plans to respond to the US $369 billion (€340 billion) Inflation Reduction Act (IRA) by relaxing state aid rules on tax credits for green investments. A portion of the €800 billion NGEU fund could also be directed towards tax credits. By relaxing restrictions on tax credits, the EC seeks to emulate one of the advantages of the IRA, simplicity of access. The…

ECB's president Christine Lagarde

European economy 2nd February 2023

ECB hikes policy rates by 50bp

Annalisa Piazza (MFS Investment Management) | The ECB hiked policy rates by 50bp and pre-committed to hike by another 50bp in March. The depo rate now stands at 2.50%. Looking ahead, the ECB is widely committed to keep rates in restrictive territory to reach the inflation target in the medium term. The overall communication by the ECB remains relatively hawkish as the policy stance remains restrictive. That said, the market…

fata morgana

European economy, Markets 2nd February 2023

The Fata Morgana, or how markets ignore that the greatest risk for 2023 lies in overestimating economic growth

Banca March | Sometimes, when the sun’s rays hit the sea water and there is a big difference in temperature, an optical illusion takes place which creates visual effects that can lead us to think that a boat is capable of “flying” several metres above the horizon. This effect, a mirage, is called Fata Morgana. Is this effusive start to 2023, in which global stock markets are up more than…

REE-grids

European economy 1st February 2023

January electricity price in Spain (€70/MWh) half that of large European economies (€140/MWh)

ASE Group | Renewable generation reached 13,559 GWh in January, beating its previous record in March 2018 (13,204 GWh). The pull from wind and hydro has allowed renewables to respond to 65.1% of electricity demand, its highest mark to date. Wind power leads the mix with 32.4% of the total, after producing 38.1% more than a year ago. Meanwhile, hydroelectric power increased by 94.2% compared to a year ago, according…

EuroStoxx50 1

European economy 31st January 2023

Consensus remains optimistic, expecting +1.3% for Euro Stoxx 600 EPS.

Santander Corporate & Investment : First serious test for credit markets. After the several buckets of cold water coming from the Fed and the ECB since Jackson Hole, the last one in mid-December, here comes a new test for the markets. And especially in the US in view of the 50bp cut still expected for 2H23. And with the equity market still not clear on the S&P500, with 70% of…

Veronik Grimm

European economy, European politics, Interviews 28th January 2023

Veronika Grimm: “the high costs of fossil energies represent a stimulus to accelerate the transformation towards renewable energies”

Lidia Conde (Francfort) | Veronika Grimm (Rendsburg, Germany, 1971) sits on the German Federal Government’s Advisory Council of Economists, which analyses the country’s economic development on the basis of scientific criteria and publishes a report every autumn in which it expresses its analyses and forecasts. Following its opinion, the government in turn responds to the council’s recommendations. Now, Grimm predicts that the economy of the continent’s leading power will shrink…