MADRID | J. P. Marín Arrese | Both the main economic institutions and think tanks cast a gloomy forecast on Europe. The IMF leads the way, advocating for swift action to revamp an ailing growth performance. Its blatant U-turn has drawn scarce criticism. Not so long ago, it endorsed hawkish views on the need to implement full-fledged austerity, no matter the cost, thus contributing to trigger the rotten conditions it now reviles.
MADRID | By Julia Pastor | “Today we return to the bond markets after four years,” Greek Finance Minister Yannis Stournaras said on Thursday just before his country’s 5- years bonds matched analysts’ best expectations: €3bn over estimated €2-2.5 bn, with a demand around €20 bn and interest rates of 4.95% against foreseen 5-5.2%. As good food does, the auction is nourishing the twice bailed-out EU economy.
MADRID | By The Corner | “I would like to stress that the risk of a self-reinforcing deflationary downward spiral consisting of falling wages and prices, as evoked by some, is also low, despite the present, very low inflation rates in the euro area. These are mainly a result of falling energy prices and the adjustment process in crisis countries,” European Central Bank Governing Council member Jens Weidmann said on Tuesday, playing down deflation risk. Anyway, what happened with the ECB’s 2pc inflation target?
LONDON | By François Cabau at Barclays Capital| The ECB stayed on hold this month. Keeping its easing bias, the Governing Council had a “very rich” and “ample” discussion on possible further easing measures. In our view, if expectations of a rebound in April HICP are not met, affecting the medium-term price outlook, the ECB may need to ease further.
SAO PAULO | By Marcus Nunes via Historinhas | “The IMF has been very generous in its suggestions on what we should do,” said Mr Draghi in a sarcastic tone on Thursday.
MADRID | By Jaime Santisteban | “The IMF nor politicians will have influence on the ECB as long as Mr. Draghi is running it” Link’s chief analyst J.J. Figares points out. As expected, the monetary authority announced on Thursday that it will stand still in spite of deflation tensions, maintaining interest rates at an all-time-minimum 0.25 % and choosing not to use the little ammunition it has left. However, Mr. Draghi left the door open for stimulus if needed.
MADRID | By The Corner | Bundesbank’s Jens Weidmann shift, more inclined to consider bonds purchases, basically reponds to pure economic policy. Although it could anticipate those are closer than ever, it does not mean that ECB is to take action in today’s meeting. Most of analysts at Madrid’s financial place agree that Draghi would be more explicit regarding eventual tools to fight deflation- or low inflation as European authorities prefer to call it now-. He could announce some kind of corporate financing support such as securitization’ buyings at most.
MADRID | By Jaime Santisteban | Market makers woke up with a torrent of data explaining how first quarter played out: Spanish public deficit, Eurozone’s activity indicators, and many more.
LONDON- THE WEEK THAT WAS | By Victor Jiménez | Did Bundesbank president Jens Weidmann just had a Mario Draghi-like moment? In July 2012, while bets against the survival of the Eurozone community of countries remaining whole piled up to stress levels that presaged a self-fulfilling prophesy, the president of the European Central Bank (ECB), Mario Draghi, let go in his now famous London speech a “we’ll do whatever it takes” to protect the common currency whose deterrent consequences have rippled to today: we might be messy, the message conveyed by Draghi came to mean in the British City and Wall Street, but we know how to make the anti-euro speculative bubble burst; and it is an easy thing to do.
MADRID | By Julia Pastor | European sovereign bonds markets have put some champagne bottles on the fridge for next neek in the case the ECB decides to inject some stimulus on the euro zone at last. Without setting a precedent, president Mario Draghi and Bundesbank’s head Jens Weidmann seem to bring their positions over the mechanism closer. This change of direction led Spanish 10-years bonds to 2005’s minimum yields of 3.27% and was behind the successful issue of Italian public Treasury, which sold €2.5 bn at also very low prices. Just Greece’s bonds are trending downwards.