Eurozone inflation rises to 1%
In Spain, the harmonized inflation rate in November stood at 0.5%, three tenths more than in October
eurozone
Banco Sabadell: from Over to Equal-Weight, and P. O. from 1.20 to 1.10 eur/share
Morgan Stanley | Bank analysts raised the sector to Attractive a few weeks ago because our macro no longer expects depo-type cuts and this increases confidence that profit estimates have hit a minimum in 2H19. We estimate a flat growth of the NII (+ 0.6%) in 2020 and 2021. There is optionality in the charge for deposits (could add 3% to the NII of the Eurozone banks).
Eurozone’s macro adjustment – (mostly) Checked
The best indicator of activity in the Eurozone is not the PMIs, but the Sentix Index, the investor sentiment meter: although it is true that it is still at low levels, it just experience the highest rise since August 2009.
Eurozone composite PMI at 50.2, its maximum for the last two months
Eurozone’s economy remains stuck near the stagnation at the beginning of the fourth quarter of the year. The demand for products and services has fallen for the second consecutive month, according to the latest data from Markit’s PMI index.
Central banks do what they can
DWS | “First, do no harm.” That command may, or may not have been part of the Hippocratic Oath among medical practitioners since ancient times. Central bankers, however, appear increasingly keen to follow that maxim on both sides of the Atlantic. On Wednesday, the U.S. Federal Reserve (Fed) once again lowered key rates by “only” 25 basis points to a target corridor of 1.75%-2.00%. And once again, its reasons included subdued inflation as well as risks resulting from weaker global growth and various trade conflicts, justifying another insurance cut. In that sense at least, President Trump has seems to have influenced central-bank policy.
Eurozone: the short-term impact of issuing instruments that increase high-quality credit bonds would be zero
Christine Lagarde, the nominee to be the European Central Bank’s next president, vows for the issuance of financial instruments that group bonds from different EU members which could act as refuge assets and increase the supply of bonds with high credit quality in the EMU.
Fears of a slowdown more pronounced
Investment Desk, Bank Degroof Petercam │ Fears of a slowdown are more pronounced. We are seeing a slight reduction in trade tensions since President Trump announced a partial delay in the imposition of new tariffs on Chinese products. The tariffs on approximately half of the 300,000 goods subject to the measures will be introduced from 15 December instead of September.
Eurozone manufacturing PMI (46.5) shows worst deterioration since December 2012
CdM | Economic growth in the Eurozone manufacturing sector continued to contract in July, and did so at the fastest rate since December 2012, according to the latest PMI index. Germany remained a source of weakness, registering its largest deterioration in 7 years.
Enjoy the holidays: Autumn could get nasty
Shaun Riordan │Many of us are already enjoying our summer holidays. Others are packing now, looking forward to relaxing on the beach, or in the mountains. Wherever we are taking our holidays we should make the most of them. A perfect storm is brewing which could hit Europe hard in the autumn, with devasting economic and political consequences.
Inflation is still no problem for the French and German economies, although it is for the ECB
Consumer price index rose 0.2% in Germany in June compared to May, while the yoy rate rose 1.6% (1.4% in May). The French National Statistics Institute, Insee, announced that the consumer price index (CPI) in France rose 0.2% in June compared to May, while the interannual rate rose 1.2% (0.9% in May). All figures coincide with analysts´ expectations.