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The Corner contextualizes the EU’s economy from Spain with exclusive analysis from market leaders.

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Volatility: Buy some protection before heading to the beach

Markets

MADRID | The Corner | “We have been living in an unusually low volatilities -both implied and realized- environment,” JP Morgan’s Fernando Cavia argues. But the last two weeks analysts are seeing a change of trend: protection is gaining fans among European institutional investors who see some threat to equities’ potential.

 

World economy

What China’s premier asks in meetings with economists

BEIJING | By Liu Shengjun via Caixin | When China’s premier Li Keqiang recently met six experts to talk about reforms, he quizzed them on their data and bemoaned slow progress in changing local governments.

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Companies

Apple: “There is upside to gross margins” (UBS)

MADRID | The Corner | “Apple became a stalled growth stock that has started to show momentum again,” analysts at UBS believe. The tech giant is announcing its fiscal 3Q results on Tuesday after the markets close. Although 3Q reports have historically been sluggish for the firm because clients don’t want to purchase gadgets until the new ones come out in September, expectations are high. UBS rises their price target from $100 to $115 per share, among others because some new product categories could “put the mojo back in the story.”

apple
In Europe

Olé, Katainen

MADRID | The Corner | New Commissioner for Economic and Monetary Affairs Jyrki Katainen –Finnish, as his predecessor Olli Rehn- has pledged pure orthodoxy about the European Stability Pact. In an interview with German daily Die Welt, Finland’s former Prime Minister and now one of the most powerful men in the EU ruled out speculations about creative interpretations of the fiscal framework. Mr Katainen is the same who, during the worst moment of the crisis (Aug 2012), asked Greece and Spain for collateral in exchange for aid and reckoned that some peripherals were introducing major structural reforms that were “simply not being recognized in the market.”

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In Europe

In third straight month of decline, industrial turnover falls 4.9 pct in May

ATHENS | Via Macropolis | The Turnover Index in Industry continued heading south for the third successive month dropping by 4.9 percent in May from a revised -10.5 percent in April, according to the Hellenic Statistical Authority (ELSTAT). The May performance indicates the ninth negative reading in the past 17 months, while four months showed a double-digit drop over this period.

Greece
World economy

China embraces credit expansion

MADRID | The Corner | The world’s second economy is entering an enthusiastic summer period, with credit lending indicators rising in June. New loans denominated in yuan grew up by 1.08 bn CNY in China, aggregate financing went up by 1.97 bn CNY and the M2 monetary offer, in 14.7% year on year in June. All these data exceeded market expectations and show that the authorities are favoring the expansion of credit to boost growth.

china credit
In Europe

Europe: Quo vadis inflation?

MADRID | The Corner | Although the eurozone final consumer price data for June came in line with their expectations, analysts at Barclays believe the common currency club may struggle to absorb “rising labour supply into employment given growth potential.” That is why further structural reforms to expand labour-absorption capacity are essential to avoid persistent disinflation on wages and, ultimately, consumer prices, they say. 

inflation europe