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Ursula

European economy, Relevant News Item 14th February 2023

European Commission upgrades forecasts but inverted German debt curve points to recession

The European Commission has raised its 2023 growth forecast to 0.9% vs 0.3% and lowered its inflation forecast from 6.1% to 5.65% for this year. The note highlights that domestic demand could turn out to be stronger than expected if the recent declines in wholesale gas prices are passed through to consumer prices more strongly, which we doubt, and consumption proves more resilient. In fact, this has had little reaction…

capital energy auction

European economy, In Europe 13th February 2023

Helena Viñes to pilot new version of European Platform on Sustainable Finance

F.R. | Helena Viñes, director of the CNMV, is the new Chair of the Platform on Sustainable Finance, the European body that advises the EC on sustainability, including the strategy and also the drafting of specific projects such as the taxonomy. Viñes will lead the new path of a Platform that has reduced its number of members from 57 to 35 in an attempt to improve its efficiency and operability….

Hydrogen Spain

European economy, European politics 10th February 2023

France clashes with Germany and Spain over “pink” hydrogen

Banca March | The lack of support from Germany and Spain for labelling nuclear-derived hydrogen – pink hydrogen – as “green” within the European taxonomy has infuriated the French government, which claimed to have the commitment of both countries. The dispute could call into question the construction of a gas pipeline linking Germany and Spain, as well as delaying European green legislation.

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…