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Markets 12th April 2012

Standard Life: be patient, deleveraging is a long-term process

LONDON | Standard Life Investments, the global investment manager, said on Thursday that the debt deleveraging cycle was showing signs of improvement, especially in the US, while admitting that the process remains a long and complex one after such a major financial crisis. In the latest edition of Global Outlook, Standard Life Investments highlighted that one of the key features differentiating this business cycle from most of its predecessors was…

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In Europe 12th April 2012

Euro area’s green shoot: industrial production up by 0.5%

In February 2012 compared with January 2012, seasonally adjusted industrial production grew by 0.5% in the euro area and by 0.2% in the European Union. In January production remained stable in both zones, said Eurostat, the statistical office of the European Union. Year on year, though, industrial production dropped by 1.8% in both the euro area and the EU27. In February 2012 compared with January 2012, production of energy grew by 7.7% in the…

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Spanish economy 12th April 2012

What the Spanish president said to his MPs …and to Mario Monti

His words appeared today scattered everywhere accompanied by odd yet expressive pictures, undoubtedly making for fitting material in the euro peripheral saga. He would have reaffirmed a commitment to abide by a deficit target that was negotiated rather than agreed with the European Commission, most accounts tell us, and scolded some his outspoken neighbours in a tit-for-tat monologue. Since Spain’s president Mariano Rajoy talked on Wednesday to his People’s Party parlamentary group,…

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Markets 12th April 2012

Listen, Germany: it’s not (only) a debt problem, we need direct investment

By Luis Arroyo, in Madrid | A misdiagnosis can be fatal for the patient. Especially if the doctor is German, or Spanish but disciple of the Bundesbank school. Inflation is bad and so the public deficit is, that is the slogan. Let the people discuss whether this or that department should be reduced or not, and what about pensions or public investment?, VAT yes or no?, while the economy gets worse and…

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Markets 11th April 2012

Barclays’ Alberto Vigil: “markets will pressure Germany and trust more Spain”

MADRID | According to Alberto Vigil, analyst at Barclays in Madrid, the peripheral euro risk and particularly Spain’s has been exaggerated by the markets, which would be discounting an economic situation perceived as poor and with a very limited range of choices. Yet, Vigil maintained an optimistic opinion and said investors will reconsider their position when reviewing the strengths of the country. “Spain could have done its reforms much better, but…

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Markets 11th April 2012

Dwindling confidence in Spain

MADRID | People at command in Madrid seem baffled by the massive onslaught inflicted on the economy. A steeply rising risk premium coupled with the severe battering the stock market is receiving have dampened any hope to steer out of trouble with minor collateral damage. The dream of a soft landing has switched into the nightmare of plausible intervention. Fear to fall in that abyss has materialised in a rather hectic…

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In Europe 9th April 2012

Germany is the problem

By Luis Arroyo, in Madrid | John Authers, in Trends That Don’t Seem to Make Sense, have some pertinent questions to share. The one that has attracted my attention is: Why is the euro still so strong when at all other times a currency with so many risks would be certain to weaken? Resilience of the euro is startling and damaging. The eurozone’s crisis has been driven by balance of payments problems…

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Markets 9th April 2012

Newton GDB Fund: “austerity is not for weak economies”

LONDON | In a report to investors in London, Newton Global Dynamic Bond Fund, which is part of Bank of New York Mellon, noted that political decisions taken by the European Comission regarding the euro crisis are a source of worry for the markets. In fact, plans to tackle weak economies in the periphery may be raising the chances of default. Newton GDB Fund said that its portfolios have increased…

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In Europe 9th April 2012

Is Spain heading for full intervention?

MADRID | Spain seems crippled by mounting economic woes. It faces a steep rise in risk premium fuelled by plunging confidence on its ability to reverse the bleak outlook ahead. Recession takes its toll in terms of higher unemployment, budgetary deviations and extensive deterioration in the banking sector. Reforms undertaken so far have failed to deliver any tangible benefit. Labour market overhaul has only helped to accelerate lay-offs, with no impact…

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In Europe 8th April 2012

Easter read (4) | Two years digging an empty grave for the euro

Many economists and the Anglo-Saxon financial gurus have been killing the euro month after month since early 2010. But, even if their doomsday predictions have miserably failed so far, their negative influence over the markets can not be neglected. By Fernando Barciela, in Madrid | PART 3 | Some banks, especially in the UK, were not far behind the panic wave and at that time announced that they had intensified their contingency plans before the more than probable failure of the euro. After…