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Turkey | IP consolidates the "bottoming-out" signals

April 16, 2019
Industrial Production (IP) contracted by 5.1% yoy in calendar adjusted terms in February (-6.2% Consensus& -6.7% BBVA Research). IP (sca) recovered by 0.7% in the first 2 months of 2019 compared to 4Q18. A prudent economic policy stance is key to maintain the recovery in the coming quarters as the new round of financial volatility poses some risks for the rest of the year.

Portugal | Growth outlook for the two-year period revised down

April 16, 2019
After Portuguese GDP grew at an average rate of 2 .1% YoY during 2018, BBVA Research forecasts that its growth rate will moderate to around 1.5% in 2019. This scenario is in a context of a slowing global economy, particularly in Europe. Even so, the recovery will continue, supported by positive momentum in domestic demand, which will enable GDP to rise by 0.3% in 1Q19.

Mexico | Positive signs in fiscal policy

April 16, 2019
Mexico’s Ministry of Finance and Public Credit (SHCP) has recently issued indications that I view as positive and that have been well received by the markets. The most important of these concerns the recently announced preliminary criteria for economic policy.

Market Comment | Steady financial markets await activity figures from China and Europe

April 16, 2019
Positive market sentiment extended today amid signs that US is bending to ensure a quicker trade deal with China. However investors’ mood tempered over the day and markets ended largely unchanged after mixed banks’ earnings, and caution ahead of important economic data, in both China and Europe, to be released this week, jointly with US companies earnings results.

Eurozone | More protracted weakness to cause lower growth in 2019, some recovery in 2020

April 16, 2019
GDP forecasts revised down to 1.0% in 2019 and 1.3% in 2020 driven by global headwinds and a delay in the recovery. The strength of domestic factors along with accommodative monetary policy should continue to underpin consumption and investment, while fiscal policy is slightly more expansive. The most imminent risks remain Brexit and protectionism.

Spain: greater risks for economic activity

April 15, 2019
The Spanish economy is currently solid, although there seems to be a growing feeling of vulnerability. The growth in GDP remained at around 0.6% per quarter at the start of the year, which in annualized terms means a growth rate of approximately 2.5%.

Market Comment | An eventful week but limited surprises keeps investors hooked on bonds

April 13, 2019
It was an eventful week, but most of the events delivered the expected outcomes. Thus, investors stuck into bond markets, led by dovish central bank rhetoric, some improvement in the economic activity and mute inflation pressure, alongside some respite on Brexit.

Global | Lower global growth in 2019, but still soft landing due to policy measures

April 12, 2019
We lower our 2019 global growth forecast to 3.4% from 3.5% due to persistent idiosyncratic factors, particularly in the Eurozone, and higher uncertainty driven mainly by trade protectionism and Brexit. However, further monetary policy accommodation and policy easing measures by China would favour a soft landing.

Financial Regulation: Weekly Upadate. 12 April 2019

April 12, 2019
Highlights: BCBS issues guidelines for the mapping process under SA. EU Council extends Art.50 process. Council of the EU adopts NPL reform. ECB presents 2018 SREP results. ESAs publish annual report. PRA consults on changes to the Branch Return Form. FRB consults on changes to the regulatory framework for foreign banks.

Mexico | In February, credit grew in double digits and its main impulse was to companies

April 12, 2019
In February 2019, the nominal annual growth rate of the balance of the current credit portfolio granted by commercial banks to the private sector was 10.3% (6.1% real). This rate was slightly higher than that of the previous month (10.1%) and lower than the same month of 2018 (12.0%).

Market Comment | Investors stick to bonds amid Fed’s caution and Brexit uncertainty

April 12, 2019
Market sentiment was slightly positive today with early indications that investors may have resumed their ‘search for yield’ in the wake of reinforced dovishness by major central banks, some bright spots in economic data, alongside news that the Brexit deadline was extended.

FOMC Minutes: March 19-20, Meeting

April 11, 2019
According to the minutes, members expect the pace of economic expansion to moderate in 2019, mainly due to weaker global growth and a smaller impact from fiscal stimulus.

Market Comment| Central bank caution, moderate inflation weighs on bond yields

April 11, 2019
Investors had been cautiously shifting into risky assets ahead of key events this afternoon. However, European yield declined across the board and the Euro depreciated after the ECB meeting and ahead of the EU summit on Brexit.

The ECB reaffirms its dovish tone

April 11, 2019
April was a transition meeting for the ECB, with no changes in the forward guidance and little information on hot issues (liquidity measures and tiered-deposit rates). Still, Draghi sounded dovish on the macroeconomic outlook and his reiteration that they are ready to act with all available instruments. We expect details on the TLTRO-III at the June meeting.

Market Comment | Renewed woes on global growth and trade keeps markets in check

April 10, 2019
Global risk assets started on a buoyant note early today as most Asian equities advanced but the mood reversed in advanced markets with S&P 500 registering its steepest drop in two weeks, weighed by US tariff threats on the EU and a growth warning by the IMF, which cut its global growth outlook to lowest since the financial crisis.

U.S. | Oil Prices Outlook. April 2019

April 9, 2019
OPEC+ cuts are tightening the market and driving up prices. The deal could be extended for the entire year. Sanctions to Venezuela and Iran could tighten supply further. However, OPEC has significant spare capacity to offset upward price pressures. In 2019, U.S oil production will expand further while substantial transportation capacity will be added.

Market Comment | Market steady ahead of eventful week. ECB Preview

April 9, 2019
After last week investors’ shift into risky assets, the risk-on mood tempered at the start of this eventful week.

Risk of economic anemia

April 8, 2019
The risk that the main developed economies are moving towards a regime of reduced economic growth in the medium term has once again gained relevance in recent months. It has been driven by the increase in the probability of recession in the United States and the eurozone, and the relapse of inflation expectations and long-term interest rates in both regions.

Sovereign debt in European banks

April 8, 2019
European banks hold sovereign debt on their balance sheet for multiple reasons. Firstly, sovereigns are eligible in order to comply with liquidity requirements. In addition, they can be used as collateral in the private repurchase markets ("repo") and to obtain funds from the central bank.

Market Comment| Risk-on mood returned amid positive economic data and trade hopes

April 6, 2019
Risk-on mood returned to the markets this week amid positive surprises in the US and China PMIs, rising hopes for a near term US-China trade deal and the declining probability for no-deal Brexit, which together offset a cautious view from the IMF on the growth outlook.

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