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If only Citi was right and QE came…

Financial markets

MADRID | By The Corner | When Autumn comes, so will QE. At least that’s what economists at Citigroup are predicting. “We believe that the chances of unsterilized large-scale asset purchases (LSAPs) of public and private assets being launched this year have (…) increased to more than 50:50,” they said in a note on Tuesday. How much of a stimulus shot are we talking about? To have any effect it should be of at least 1,000 billion euros ($1,381 billion), they note, which would lift the inflation rate toward the ECB’s “below, but close to 2% target”.  It could always be a decaffeinated step as some market makers are warning, but the truth is many on both sides of the Atlantic are hoping for Mr Draghi to make a move.

World economy

The Fed has (unofficially) adopted a triple mandate

SAO PAULO | By Marcus Nunes | According to San Francisco Fed president John Williams (and he´s far from being a lone voice) it seems “financial stability” is right up there together with inflation and unemployment.

San Francisco FED
Financial markets

Bankinter results cause mixed feelings; Moody’s points to a sexier Spain

MADRID | By Jaime Santisteban | Bankinter, the Spanish bank with highest credit rating announced results under expectations, according to Santander. Analysts look optimistic on Spanish equities profitability and expect a 15% growth in Ibex 35. Spain walks on a firm and positive trend, points out Moody’s.

 

News in Europe

The juicy business of speculating with Spanish sovereign debt

MADRID | By Julia Pastor | Speculators who dared to buy Spanish debt in 2012 when it yielded 7.5% and priced a record low of 88.6% made a good deal with gains of 38%, now that Spain’s 10-years bonds’ interests near 3% and price stands at 122.6%. Moody’s thinks the country’s sovereign debt is going upwards, alongside Ireland, thanks to its economic, institutional and fiscal strengh. However, Italy’s rating is suffering from the opposite trend.

debt
News in Europe

BoE raises expectations (and ECB misses them)

MADRID | By Ana Fuentes | As ECB officials spend their time debating what form of QE the euro zone needs to fight deflation risk (note that although its inflation target is 2%, the central bank keeps on sitting on its hands while its balance sheet is shrinking), more data point to the positive effects of unconventional measures on growth. Check this one recently published by the Bank of England: the mere announcement of a QE shot corresponding to 1% of GDP caused a 0.36% real GDP increase and a 0.38% CPI rise in the U.S. ­–a little less in the U.K. Indeed, hope can move mountains… and money.

 

BoE
World economy

The Long Goodbye

BEIJING | By Andy Xie via Caixin | What’s important in today’s financial world is perception, not substance. If you check out what important financial figures have proposed in the past, they have been good for forming bubbles, not for growing the real economy.People around the world will only begin to question their economic policymakers when they realize living standards are slowly worsening.

Real economy
News in Europe

Spain thrives in EU car market rebound

MADRID | By The Corner | A good gauge to measure EU consumer’s confidence, the regional car industry points to its recovery. Car sales increased by 8.4% in 1Q14 to 3.24 million of vehicles, while number plate registrations grew by double digits 10.6% in March to 1.44 million.

car market
Financial markets

Mr Draghi, you’ve failed –the ECB can’t keep financial & monetary markets alive

MADRID | By Luis Arroyo | Something is wrong in the “kingdom of the Euro;” it’s just incomprehensible. The ECB is unable to keep the financial and monetary markets alive, which is a huge failure in view of the forthcoming European elections. The following charts show that the euro holds on just because we are asleep.

ecb
Financial markets

Market chatter: well-rested European stocks are back to work

MADRID | By Jaime Santisteban | European markets are happily back from Easter as Wall Street enjoys its highest gains in 6 months. Spanish Ibex 35 keeps last week’s positive mood. Risk premium drops to 155 basis points. Spanish Treasury will sell up to 3 billion euros in 3-month and 9-month bills today.

Financial markets

AQR fails to address banking woes

MADRID | By J.P. Marín Arrese | The ECB is frantically submitting to scrutiny up to 60% of risk-weighted assets from the 128 biggest banks in Europe. This step stands as its last chance to avoid inheriting former shortcomings and mismatches. When it takes over responsibility for supervision later on this year, it will be blamed for any financial blunder. No wonder it wants to ensure that no nasty surprise lies ahead.

AQR