Today Are central banks correctly assessing macro data?
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The Corner contextualizes the EU’s economy from Spain with exclusive analysis from market leaders.

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ABS drive, to the point


MADRID | The Corner | Mario Draghi will finally reveal the details of the private debt purchases program on Thursday. Markets take for granted that he will continue feeding expectations that he is willing to do more if necessary. The ECB’s President is however not likely to announce the acquisition of retained ABS, nor to include the so-called mezzanine tranches. As for the rumours about Mr Draghi pushing the ECB to eventually buy bundles of Greek and Cypriot bank loans with “junk” ratings, our readers should note that those tranches would be senior, and in very small amounts. However, “symbolically is an important issue about what they are willing to do,” JPMorgan analysts pointed out on Wednesday.



In Europe

IN DEPTH: Is low inflation the greatest problem for the European economy?

MADRID | By J. L. Martínez Campuzano (Citi) | I beg your pardon, I meant to say “persistently low” inflation. If it is not (and here we are in agreement), then why is the ECB repeating the same argument over and over to justify its decisions? Non-existent official rates, negative deposit rates, unlimited liquidity provision for banks, and the latest invention: the purchase of securitised corporate paper for credit operations. 

euro dollar
World economy

China under the markets’ spotlight: What is really going on?

MADRID | By Ana Fuentes |  Protests in Honk Kong have served to put even more pressure on Beijing’s economy, which is already struggling to maintain growth, boost household consumption and ease credit lending. The last monetary easing by the country’s central bank and the rumours that its governor could be replaced for being too reform-minded has seen certain questions arise. Are they pertinent or just distorting noise?

An employee counts Chinese 100 yuan banknotes at a branch of Bank of Communications in Shenyang
In Europe

The independence of Catalonia and the future of Spain- reading the small print

MADRID | By Fernando G. Urbaneja | The debate about the independence of Catalonia is at the centre of Spain’s political concerns. The Catalan Government and the parties supporting it -covering a broad spectrum, from the centre to the extreme left- have taken every step to call the referendum (called query) that would open the door to independence. The Spanish authorities have taken steps to prevent a consultation-referendum which it says contravenes the text and spirit of the 1978 Spanish Constitution.


Greek debt viable, no haircut needed

MADRID | The Corner | As Greece and its euro-area creditors meet on Thursday to review its progress ahead of another round of talks on repayment terms for its public deb, the worst for Athens seems to be over. The Mediterranean country doesn’t need a haircut, its debt is sustainable, as head of the EFSF ESM Klaus Regling commented in Brussels on Tuesday. However, and despite the profound, painful reforms the country has been through, recovery is hampered by private debt of households and companies: about 164 billion euros ($208 billion), 90% of GDP.

Greek debt no haircut needed

Draghi will push to include Greek and Cypriot junk bonds in ABS drive

MADRID | The Corner | The ECB president announced his intention to push for the central bank to accept Greek and Cypriot bank loans with “junk” ratings to bolster the frail recovery in the Eurozone’s periphery.


In Europe

ECB’s QE: how it can really work (or fail)

MADRID | By Javier Arce |  The true danger of a third recession in the eurozone can dissipate, and quickly. Only if after the stress test and the banking union, the euro’s depreciation, the EQ, the takeover of Juncker and its new Commission… we realize that we live in El Ejido, and not in Hernani. Let me explain that.