MADRID | Spain seems crippled by mounting economic woes. It faces a steep rise in risk premium fuelled by plunging confidence on its ability to reverse the bleak outlook ahead. Recession takes its toll in terms of higher unemployment, budgetary deviations and extensive deterioration in the banking sector. Reforms undertaken so far have failed to deliver any tangible benefit. Labour market overhaul has only helped to accelerate lay-offs, with no impact…
By Tania Suárez, in Madrid | Manuel Sousa Andrade is head of investment services and trading at Saxo Bank. Sousa proposes that if we want to get out of the current crisis, it’s necessary to get rid of the wrongs of the past and to change investors’ habits. Regarding the public debt, you say that investors want to ‘protect themselves’ and that’s why they ask for ever higher yields. Can…
MADRID | Afi analysts drew today investors’ attention to the widening divergence between the manufacturing cycle of the European Monetary Union and other economic blocs. PMI figures of the manufacturing sector fell again in the euro zone’s aggregate indicator, slipping into activity contraction levels. Apart from China’s, the rest of PMI numbers are either consolidated or approach the expansion area. At Afi, experts forecast a EMU GDP downward correction of 0.1pc…
By Jacobo de Regoyos, in Brussels | The idea that Spain is the real sick man of Europe is catching on again. Suddenly, there is less talk of Greece and Italy. Portugal is going through its particular tunnel in silence. And as for Ireland, almost nobody in the financial media seem to remember its problems. Yet, Spain is back, surrounded but Europe’s ringing alarms. Proof of this is the evolution of the risk premium…
AFI analysts duly noted on Friday that markets have again focused their irritation on Italy and Spain. Corrections have shown a measure of the punishment investors are willing to inflict on those euro zone member countries seen as the weakest link unless Brussels gets its act together, since domestic solutions will necessarily be patchy. “Spanish and Italian sovereign debts have this week become protagonists, particularly over the short section of…
MADRID | In a note to investors, Morgan Stanley analysts let go a few words from the bright side of their view on some of the euro zone countries that have endured the worst part of an altogether bumpy week. And here at The Corner, we cannot help but spread the love. Experts at Morgan Stanley maintain their estimates for the general GDP of the European Union, which points at…
By Julia Pastor, in Madrid | The hangover following the second LTRO round has brought no headaches, so far. Analysts at the Spanish bank Sabadell have described as ‘very positive’ the €530 billion demanded to the ECB last Wednesday, as well as the increase of the participating European financial entities to 800. “It can be said that attending these auctions is not a stigma anymore,” say the experts. Furthermore, they…
The Spanish minister of Economy Luis de Guindos’ visits to London earlier this month and to Washington on Friday have borne fruit. Yield of 10-year Spanish sovereign bonds have softly fallen back to the 5pc region (it was 5.6pc), while the CDS spread in comparison to German bonds has tighten and is now 316bp from 380pb last week. The Italian 10-year bond has also behaved in a positive way, with…
MADRID | Mario Monti explained in an interview to the daily newspaper El Mundo that the Spanish labour reform ‘goes in the direction’ of the one he wishes to implement in his country. The Italian prime minister also comments on the reforms his government has carried out in Italy, such as the pension reform and he praises the Italian people’s ‘mature attitude’ when “it came time to accepting the sacrifices that…
By Julia Pastor, in Madrid | The eventual coming out of green shoots within the dark scenery outlined by the world economy is well worth a mention. The analysts at the City of Madrid emphasise three good macroeconomic figures. Particularly, Santander refers in their analysis to Europe’s PMIs, which even in recessive zone at 48.8, compared to previous 46.9 of December, are standing at their highest mark in the last five…