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Eurozone | Growth moderation has continued in Q2 and headline inflation has shot up

June 23, 2018
The Eurozone could grow at about 0.4% QoQ in the second quarter after a similar figure in 1Q18, according to our BBVA-MICA model. This poses a downward bias to our 2.3% growth forecast for 2018. Inflation accelerated rapidly in May (1.9%) due to higher commodity prices and the euro depreciation, but the core component has progressed as expected to 1.3%.

Financial Regulation: Weekly Update. 22 June 2018

June 22, 2018
Basel Committee issues progress report on Risk Data Aggregation. EP adopts internal position on banking package (CRD V). EBA publishes annual report, and issues a consultation on the conditions that institutions need to calculate K-IRB. In the USA, FRB publishes results from supervisory stress tests, and the SEC publishes a draft strategic plan.

Deepening EMU to create opportunities and increase competitiveness and growth in the EU

June 22, 2018
Despite the progress in improving the governance in the last years, the present architecture of EMU is not enough to deal properly with future crisis and face the challenges of the on-going digital revolution. A genuine monetary, fiscal, banking and economic union, with a non-constrained interaction between monetary and fiscal policies.

Mexico | Monthly Report on Banking and the Financial System. June 2018

June 22, 2018
Domestic sources of financing supported the non-financial private sector. Housing prices rose by 8.7% in the first quarter of 2018. The prospect of a long drawn-out renegotiation of NAFTA leads to negative differentiation of domestic assets. Incorporation of new rating agencies. Banco de México: consultation on subordinated bonds.

The use of cash and its determinants

June 22, 2018
The digital revolution is leading to an increased use of electronic payment instruments; however, cash is still used in 79% of retail payments. This note analyses the factors driving the use of cash for payments across EU countries classified in four categories: access to cash and banking products, degree of digitalisation, macroeconomic environment and cultural factors.

Portugal | The slowdown in GDP growth continued in 2Q18

June 21, 2018
Portugal’s GDP grew by 0.4% QoQ in 1Q18, 0.3 pp less than the growth seen in the previous quarter and that forecast by BBVA Research. Domestic demand continues to grow strongly, in contrast with the recent weakness seen in exports, which have been affected by the reduced thrust of the euro zone economy. BBVA Research estimates that growth in 2Q18 will be around 0.3% QoQ.

United States Economic Outlook. June 2018

June 21, 2018
Incoming data reaffirms our baseline scenario of moderate to high GDP growth and higher inflation in 2018 & 2019. Federal Reserve poised to raise rates twice in the second half of the year and possibly three times in 2019. We continue to expect above average growth in employment which will push the unemployment rate to 3.6% by 2019.

Global | Growth is still holding up despite increasing uncertainty

June 20, 2018
Global growth remains on a strong footing at the beginning of 2Q18 despite the high levels of uncertainty, especially coming from trade news. Hard data and sentiment indicators remain solid but with growing differences across areas. Inflation surged in advanced economies on higher commodity prices while monetary policy normalization continues.

We expect Banxico to hike the policy rate

June 20, 2018
A deterioration of inflation risks tips the balance towards a hike

Spain | Sustained growth, despite internal and external uncertainty

June 19, 2018
Growth is expected to be around 0.8% in 2Q and the BBVA Research forecast for 2018 remains unchanged (2.9%), although there are still biases. On the one hand, the approval of the PGE18 suggests a more expansive fiscal policy. On the other hand, external uncertainty still persists and, in Spain, the relative one to economic policy has increased.

Crystal clear

June 18, 2018
Amid the growing uncertainty of the global economic scenario, stemming from the potential escalation of tariff increases initiated by the US, the main central banks have launched a crystal-clear message this week: monetary policies are entering a new phase.

G7, wounded in action

June 18, 2018
The US’ decision, just hours after the G7 summit, not to support its closing joint communiqué reaffirming the need for regulated, open multilateral global trade, may have come as a surprise to many, but it was not really surprising.

Financial Regulation: Weekly Update 15 June 2018

June 15, 2018
EBA issues consultation and opinion regarding SCA and CSC under PSD2. SRB receives final Valuation 3 report on resolution of Banco Popular. BdE adopts a series of guidelines issued by EBA. BoE publishes several policy statements on resolution and MREL. Finally, FRB publishes final rule on limits to concentration risks.

The ECB delivers on QE exit and gives strong guidance on rates

June 15, 2018
The Asset Purchase Programme will end in December 2018. However, interest rates will remain on hold at least until the summer 2019, later than expected. Macro projections were revised in line with expectations: GDP down in 2018 to 2.1% and inflation up in 2018 and 2019 to 1.7%.