The ECB’s main priority will be to fuel confidence in the financial markets and inflation will be its alibi for this. In February, eurozone CPI receded to -0.2% year-on-year and, in the short term, the region should be prepared for negative rates to continue.
The figures issued by the Bank of Spain have confirmed what we could already see with the naked eye; namely that Spaniards are losing their fear of the future and spending again. After several years of austerity, the consumers in Spain have gradually loosened their purse strings over the past year. And to such an extent that consumer spending rose 3.1% in 2015, almost tripling the 1.2% registered a year earlier.
Francisco López |The OECD has once again downgraded its outlook for global growth, especially for the Eurozone. It will only grow 1.4% this year, almost half a percentage point less than the previous forecast in November. But is the downwards revision the result of the sharp drop in share prices, or is it the stock market which is in fact anticipating that growth will slow in the coming months?
LA CAIXA RESEARCH | Convergence between core and periphery countries must improve in order to strengthen the eurozone’s future growth and sustainability.
MADRID | By Ana Fuentes | She believes that central banks should act coordinately, since competition between them can cause currency distortions. British economist and former banker Frances Coppola has been one of the main critics of the European Central Bank’s QE “because it supports asset prices, but that is all it does.” She spoke to The Corner about shadow banking and how financials should be accepting and managing risk on both sides of the Atlantic.
ZURICH | UBS analysts | Our central case is that we will not have deflation in any country except for Spain in 2015. But we cannot rule out the possibility of deflation, so here we look at assets that may outperform during periods of deflation. Generally deflation is bad for equity which de-rates aggressively but the story is more nuanced because particular sectors and styles are affected quite differently.
LONDON | Barclays analysts | The European Court of Justice has already published its opinion about the Outright Monetary Transaction (OMT): the ECB’s anti-crisis plan was “necessary” and “in principle” is in line with EU law. This much awaited opinion will have important implications for any broad-based ECB government bond purchases (QE), which we think are likely to be announced next week.
LONDON | Barclays analysts | We believe this week’s data on inflation and economic activity have provided more arguments to step up ECB’s asset purchase programmes by including EGBs on 22 January, which is our baseline scenario. Inflation entered negative territory in December and is likely to stay negative for a few months before a weaker euro improves the inflation and growth outlook.
BRUSSELS | By Jacobo de Regoyos | The previous five years of Jean-Claude Juncker’s reign were suddenly thrown into flux following the publication of hundreds of secret documents regarding agreements between the Grand Duchy of Luxemburg-during his premiership- and over 340 multinationals. In essence, this amounted to the facilitation of tailor-made fiscal schemes that allow the payment of a corporate tax close to 1% instead of the stipulated 29%.
BRUSSELS | By Jacobo de Regoyos | The previous five years of Jean-Claude Juncker’s reign were suddenly thrown into flux following the publication of hundreds of secret documents regarding agreements between the Grand Duchy of Luxemburg-during his premiership- and over 340 multinationals. In essence, this amounted to the facilitation of tailor-made fiscal schemes that allow the payment of a corporate tax close to 1% instead of the stipulated 29%.