In the medium term there are reasons to believe that the euro should appreciate very gradually over the coming year, boosted by the reduction of EMU–US interest rate differentials and the increased demand for euros to acquire the new European asset known as coronabonds.
As lockdown began, thousands of patients were sent from hospitals into care homes. In three months 18,562 people living in Care Homes died with COVID-19. Our report As if Expendable highlights the UK Government’s failure to protect older people in care homes during the COVID-19 pandemic. Cases of coronavirus are rising again in the build-up to winter, the government must learn lessons from its disastrous decisions and not repeat the same mistakes.
“Our base case for sterling remains unchanged: that some type of a compromise on state aid and fisheries will enable a barebones free trade agreement covering goods, and that the pound will enjoy a moderate 3-5% rally as a result. Assigning a percentage probability to the chance of talks collapsing is a mug’s game: everyone knows this remains a realistic probability.”
The ECB is focusing on the proactive management of NPLs, linking the dividend policy to the impact of Covid19 on credit quality. Estimates suggest an increase in delinquency rates of up to €1.4 Tr in an adverse macro scenario, equivalent to 5.7% of the capital ratio. At a round table organized last week by the Bundesbank, Banco Santander chairman Ana Patricia Botín argued that the dividend veto is one reason why the banking sector is not sufficiently resilient “in terms of its ability to attract capital.”
Intermoney | ECB President Christine Lagarde acknowledged yesterday that the central bank would consider formulas to allow inflation to exceed 2%, without being forced to raise rates and suffocate the recovery. Reality, as Lagarde indeed acknowledged, is in keeping with a world in which inflation targets must be transformed. They were designed to avoid upward deviations, but not to deal with prolonged situations of inflation deficit.
Shares in the new Siemens Energy started trading on Monday. The new company includes 100% of the former Gas & Power division plus 67% of Siemens Gamesa Renewable Energy. Siemens has handed over to shareholders 55% of Siemens Energy via a kind of share dividend, in the proportion of one Siemens Energy share for every two Siemens shares. While 9.9% goes to Siemens Pension-Trust, Siemens holds a direct 35.1% stake. That said, its aim is to continue to reduce its participation in the next 12-18 months.
The payment market in Sweden and Norway is being digitized. To give an international comparison, the cash in circulation as a percentage of GDP variable is used as a proxy for the demand for cash. In 2018, the cash in these two economies was equivalent to 1.3% and 1.5% of their GDP, respectively. In contrast, in the United States and the Eurozone, this variable was at 8.2% and 10.9%, respectively.
Lidia Conde (Frankfurt) | Are there many? Or just a few? One in five Germans believes in populist arguments or has ideas which go against the system or the elite or pluralism. Two years ago, it was one in three. According to a study by the Bertelsmann Foundation, populism is less and less popular. However, watching thousands of people demonstrating against the anti-pandemic restrictions in a country which is a model in containing the pandemic, one wonders if Germany has not gone completely mad.
Europe’s virus resurgence weighs on growth momentum: a sharp rise in virus cases has dampened European growth momentum, with the Euro area composite PMI new orders declining from a peak of 53 in July to 50 in September, following the sharp rebound from a trough of 14 in April. Weaker domestic growth momentum, in combination with uncertainty on US fiscal stimulus and rising real bond yields, has led the Stoxx 600 to decline by 5% over the past week to a two-month low of 355.
UK Chancellor Rishi Sunak today delivered a series of new measures and extensions to existing supports to help the UK economy through the winter months following the re-emergence of the coronavirus and re-imposition of wider restrictions on activity.