ZURICH | The Corner | UBS analysts explain that in September, volatility started rising in almost all major markets and asset classes. Higher Rates and FX volatility, driven by diverging monetary policies in the US and Europe, typically suggest higher activity and more favourable operating conditions for FICC. Although UBS analyts are still cautious about FICC for structural reasons, some cyclical improvement and potential upgrades in FICC consensus estimates for Q3 2014 are now more likely (UBS tweaks his CS and DBK 2014E EPS forecasts 2% and 3% upwards, respectively). For global IBs, they forecast FICC revenues up 9%, Equities up 3% and IBD up 12% y/y. In the European IB space, they prefer Barclays and SocGen for stock specific reasons.
MADRID | By Francisco López | Economic confidence dropped again in September to mid-2009 levels highlighting a worsening of the economic malaise in the Eurozone (EZ). The PMI Index fell 1.1 points to 85 points, well below the long term average (100points).
MADRID | The Corner | The Eurozone Sentix Index fell 2.7 points in August, its lowest level in a year, from 10.1 reached in July. The analysts’ consensus had expected that the indicator would go back to 9 points. Sentix attributes in a press release this decline to the approved economic sanctions against Russia and points out that “As this slump derives from an event which is subject to politics and power play, the central banks, particularly the European Central Bank, will have difficulty in trying to counter this.”
MADRID| By The Corner | Spain is to lead the EU economic recovery until 2018, according to Morgan Stanley. External sector, capital spending and internal demand would be the factors pushing the country’s growth. Regarding capex, Spanish businesses are the most inclined to rise their investment expenditure in manufacturing during year 2014 in order to boost production capacity.
MADRID | By The Corner | Barclays analysts highlight the scarce impact of the European Central Bank’s measures on the inflation expectations. This is the chart that Barclays uses to show the inflation expectations one year before and one year after ECB’s decision.
MADRID | By Jaime Santisteban | Stock indexes struggle to stay in the course after widespread drops, although weakness losses intensity. The EZ grew by 0.2% in 1Q14 (0.9% y-o-y), half the estimates, strongly disappointing market makers. This speed won’t be enough to support recovery.
SAO PAOLO | By Marcus Nunes | Mr Ambrose Evans-Pritchard explains “Mario Draghi said the ECB is studying what happened in Japan at the onset of its Lost Decade in the 1990s, insisting that the EZ is unlikely to go the same way.”