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inflation

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In Europe 29th May 2014

Draghi highlights credit constraints and risk of disinflationary expectations taking hold

LONDON | By Barclays analysts | ECB is going to cut its policy interest rate and/or announce targeted liquidity measures, with a view to support bank lending at the 5 June Governing Council meeting. In his remarks at the ECB Forum on Central Banking being held in Portugal, ECB President Draghi highlighted the risk of a negative spiral between low inflation, falling inflation expectations and credit for the euro area.

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World economy 16th May 2014

The “Rat Pack” loses one member (Australia)

SAO PAULO | By Marcus Nunes | (Note to generation y: The Rat Pack was the name given to a group of actors led by Frank Sinatra Dean Martin and Sammy Davis Jr) In 2005 Edward Nelson, at the Research Department of the St Louis Fed, wrote a very interesting paper entitled “Monetary Policy Neglect and the Great Inflation in Canada, Australia and new Zealand”.

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Markets 5th May 2014

Today’s market chatter: time to invest in Spanish real estate and much more

MADRID | By Jaime Santisteban | Feel like investing in Spanish real estate?  It’s apparently the time, according to Bankinter analysts, as European prices continue their upwards trend, financing costs are low and we see price recovery signs in big cities like Madrid and Barcelona. They suggest direct investment assets with a horizon beyond 3-5 years. Also, the EU announced on Monday that the Eurozone’s GDP will grow by 1.2% this year and by 1.7% in 2015. As for Spain, Brussels is less optimistic than the Spanish government in its forecast.

 

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Markets 25th April 2014

Credit lending: 2 ends of the financial string

MADRID | By Luis Arroyo | Which came first, the chicken or the egg? Does the credit decrease because the demand is weak or because banks don’t offer any? Requirements imposed by banks to lend money (excluding to the public administrations) are aggressive both in real and collateral interest rates. Meanwhile, the possibility that the ECB increased rates would further collapse bank credit.

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World economy 11th April 2014

Stronger US wage growth should underpin firming inflation backdrop

LONDON | By Michael Gapen at Barclays | Persistent improvement in US labor markets has caused the Fed to continue tapering and to alter its quantitative policy rate guidance in favor of qualitative language indicating that the committee is prepared to maintain the current target rate for the federal funds rate for “a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal.”

inflation

World economy 10th April 2014

Inflation: the “target” has become a “barrier”

SAO PAULO | By Marcus Nunes via Historinhas | The Fed’s (and central banks in general) preferred tactic is “wait-and-see”, usually expressed in the form of “we will monitor closely”! Instead of becoming a focal point for the coordination of expectations, inflation has become a barrier to getting the economy’s recovery back on track.

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In Europe 8th April 2014

ECB: April inflation screening mode

LONDON | By François Cabau at Barclays Capital| The ECB stayed on hold this month. Keeping its easing bias, the Governing Council had a “very rich” and “ample” discussion on possible further easing measures. In our view, if expectations of a rebound in April HICP are not met, affecting the medium-term price outlook, the ECB may need to ease further.

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Markets 2nd April 2014

Today’s market chatter in Spain

MADRID | By Jaime Santisteban | Market makers woke up with a torrent of data explaining how first quarter played out: Spanish public deficit, Eurozone’s activity indicators, and many more.