eurozone

In Europe 23rd September 2014

Change of pace in Europe: Spain, Portugal, Ireland and Belgium will lead growth between 2015 and 2016

MADRID | By Julia Pastor | ECB’s Mario Draghi brought put the bleak panorama that the Eurozone’s economy is facing on the table, and we saw it again reflected in the not-so-promising September manufacturing PMI. The index came in at 50.5 compared to 50.7 in the prior month, whereas EZ Services PMI accelerated at 52.8 for September versus 53.1 in August. Even the composite index plummeted to its lowest fee in the last nine months and reached 52.3. In Germany, both manufacturing and services indexes have also decreased; while in France only manufacturing improved, although it is still contracting.

Markets 23rd September 2014

Markets worried over weak global growth

MADRID | By Francisco López | Up to this point, investors had scarcely listened to economists’ warnings about world economic stagnation, but in the last number of days the situation has changed as commodities’ prices dropped, with debt and equity markets beginning to exert some pressure.

In Europe 23rd September 2014

Is low inflation to blame for Eurozone woes?

MADRID | J.P. Marín Arrese | Eurozone policy makers depict sluggish growth and low inflation as two sides of the same coin. This approach fails to grasp the subtle distinction between the two. Muted inflation undoubtedly stems from faltering demand linked to current stagnation. Yet it also reflects the ongoing real adjustment. Reviling it as the main wrongdoer, rather than treating it as a collateral victim, utterly misses the point in enforcing effective policy.

Markets 20th September 2014

TLTRO alone might not be a game changer for Eurozone credit recovery

MADRID | The Corner | Supply and demand conditions for Eurozone credit generation are improving – this is clearly reflected in the ECB’s latest Bank Lending Survey – but the way towards a full normalisation is still long. We believe that reduced bank funding costs might support, but will not aggressively accelerate, the recovery in credit growth.

Markets 18th September 2014

EBC’s first TLTRO misses expectations

MADRID | By Julia Pastor | As expected, ECB’s September TLTRO will not make big headlines. 255 European banks borrowed €82.6bn of liquidity below consensus estimate of €100-150bn. Although the Frankfurt-based institution doesn’t provide a geographical breakdown, banks in Italy and Spain were among the leading borrowers (40% of the total) to trim funding costs. Spanish entities are thought to have asked half of those €30bn at their disposal, although some entities “are not willing to disclose how much they asked for,” an ECB source confirmed to The Corner.

Spanish economy 15th September 2014

Spain will join countries guaranteeing ECB’s ABS

MADRID | The Corner | As expected, eurozone finance ministers have yet to agree on the guarantees requested by Mario Draghi for the riskier asset-backed securities (ABS), the so-called mezzanine level. Some countries such as Spain have already expressed their intention to guarantee them if some country of the zone euro did. Spanish economy minister pointed out that securitizations in Spain would not be at a comparative disadvantage. For the time being, not Germany nor France or the Netherlands will grant any collateral to the financial sector.

In Europe 15th September 2014

Tsipras starts to flesh out SYRIZA’s economic policy but questions remain

ATHENS | Via Macropolis | In a much-anticipated speech, SYRIZA leader Alexis Tsipras unveiled the main pillars of his party’s economic policy platform on Saturday, focusing on debt relief from the eurozone, the use of European Union funds to boost employment, a reduction in taxes and an increase of wages and pensions.

In Europe 29th August 2014

Eurozone’s credit continues to squeeze in July, especially in Spain

MADRID | The Corner | The ECB published yesterday figures on bank lending that show the outlook keep being worrying. On the one hand there was an improvement in credit to households and on the other hand a further squeeze on credit to business, especially a pronounced decline in countries like Spain. The overall balance in July is a contraction of 1.6% YoY, which represents a further improvement since it got to the bottom during November, December and January (-2.5% YoY each month). Credit in the private sector continues to contract (-2.3% YoY) in line with last month but improving over July 2013 (-3.7% YoY ) and in general over the monthly evolution in 2014. In Spain the credit contracts € 7bn (-1.2% MoM from -1.04% MoM in June) and it moves back by € 77 bn YoY (-11.7%). In Italy the set-back is even bigger MoM (-3.6%) but is limited to +1.6% YoY.

In Europe 28th August 2014

Economic sentiment worsens in Italy, Germany and France, but remains stable in Spain

MADRID | The Corner | In August the Economic Sentiment Indicator (ESI) fell in the euro area (by 1.5 points to 100.6) and the EU (by 1.2 points at 104.6). Once again the core Europe does not bring any good news, where sentiment dropped in Italy (by 4.1p to 97.8), Germany (by 1.9p to 104.1 ) and France (by 0.6p to 95.1), while sentiment remained flat in Spain (103.). Among the data published by the European Commission today, the industrial confidence fell in the EA to -5.3 in August from -3.8 in July and construction sentiment dropped to -28.4 from -28.2. Sentiment in the services industry declined to 3.1 from 3.6 and retail trade to -4.6 from -2.3. Consumer confidence remained at -10.

In Europe 28th August 2014

ECB stimulus speculations keep circulating

MADRID | The Corner | The expectation that the ECB will finally announce a QE program after Draghi’s words at Jackson Hole and the confirmation that the ECB would have hired Blackrock for advice on launching a ABS program continue to nurture the Eurozone bond rally and thereby the credit one. Yesterday many bond markets in Europe returned to record lows with improvements in 10 years of 3bp (Germany), 2.5bp (Spain) and 2bp (Italy).

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