Thursday, July 18 2019 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Updated: 1 hour 19 min ago
The economy of the Balearic Islands grew by 2.4% in 2018; further growth of 2.2% is expected in 2019 followed by slower growth of 1.7% in 2020, giving a total of seven consecutive years of economic recovery with an average growth of 2.8% per annum. The islands will create 33,000 jobs between the end of 2018 and 2020 and the unemployment rate will drop to 9.5%.
Models suggest more than 50% probability of recession within the next 24 months. Global, housing and business debt represent major red flags. Fed’s strong dovish bias a response to risks. Markets digesting the balance between weaker outlook vs. lower expected interest rates. Economic fundamentals for households and financial institutions remain solid.
In January 2019 the nominal annual growth rate of traditional deposits (demand + term) of commercial banks was 7.8% (3.3% real), similar to the previous month (7.9%) and lower than the nominal growth rate registered in January 2018 (9.0%).
Financial markets remained under pressure this week amid mounting concerns over global economic outlook. A spate of weaker economic data, dovish central bank rhetoric, combined with uncertainty surrounding US-China trade talks and Brexit dragged heavily on global bond yields.
After an unprecedented crisis, Spain has overtaken pre-crisis levels of income per capita due to a favorable combination of external and domestic factors. Although it is difficult to estimate their exact contribution, behind the current economic recovery are the effects of structural reforms, in labor and product markets, the financial system and the public sector.
Highlights: BCBS issues follow-up report on Basel III implementation. ECB issues statement on securitizations, report on banking supervision, and macroprudential bulletin. EC and ESMA issue statements on adjustments for Brexit contingency plans. ESMA issues guidelines on clearing obligations under EMIR Refit. BdE maintains the CCyB
No signs that Banxico is ready to shift into easing mode. Wording stayed hawkish but had a slight dovish tweak. We continue to expect the next move in the monetary policy rate to be down, but not until 3Q.
The mood in the financial markets has not improved despite the high-level two-day trade talks between the US and China, which resumed today in Beijing. China has announced its commitment to open its financial sector to foreign business. On the growth side, fears remained alive: today, the downward revision of the US 4Q18 GDP did not help to ease fears over global slowdown