BBVA Research

The Brazilian economy will grow 2.2% in 2019 and 1.8% in 2020, stimulated by factors such as the expansive tone of monetary policy and the increase in confidence. However, prospects for growth recovery are now less positive, mainly due to the view that the global environment will be less favorable than previously expected.

Financial markets remained cautious. The focus continued on US-China trade talks following yesterday's rumours about the US rejection of pre-talks ahead of high-level meetings next week. However, the information has been denied by both sides. The Brexit issue also came into the limelight with the possibility of a delay, while the Davos forum continues.

Global growth has slowed in recent months, affected by protectionist tensions, with a negative impact on financial markets that has been partly reversed thanks to the reaction of central banks. Our new GDP forecasts imply lower overall growth in 2019 and 2020 (3.5% and 3.4% respectively).

Regulatory authorities’ work programmes for 2019. Last steps in the negociation CRD V. CRD V negotiation: Resolution issues. Contingency measures for a no-deal Brexit. Habemus a Macroprudential Authority in Spain. Trends in digital regulation.

Cautious tone returned to financial markets amid the latest news about a formal US request for extradition from Canada of the finance chief of Huawei, which threatens to heighten US-China trade tensions. Moreover, the World Economic Forum in Davos started its first day with some important leaders missing, notably US President Trump.

In November 2018, the nominal annual growth of the balance of the current loan portfolio granted by commercial banks to the private sector was 11.8% (6.7% real). This growth rate was slightly higher than the previous month (11.7%) and was also higher than the rate for the same month of 2017 (10.5%).

Markets were little changed in a low volume trading session as US markets were closed. Today’s release of China’s 4Q18 GDP (early this morning) along with the release of May’s “plan B” on Brexit this afternoon will focus the market’s attention. The ECB meeting next Thursday, the World Economic Forum at Davos and multiple releases of economic data will be other key events

BBVA Research estimates that growth in the Portuguese economy in 4Q18 was around 0.4% QoQ SWDA. Domestic demand will have continued to be the main support of activity, while the external sector’s contribution to growth will have remained negative. This would be consistent with BBVA Research’s forecast for Portugal’s GDP growth in 2018 (2.1% YoY) and 2019 (1.8% YoY).

If economic crises serve for anything it is for us all to learn from our mistakes. Now that the worst is behind us, we should have been thinking for some time now about how to fix what didn’t work and how to safeguard what did.

Q4 2018 GDP reached 6.4% y/y, sending the full-year growth to 6.6%, which is the lowest annual growth since 1990, despite the recent easing measures and the positive signals of China-US trade relation. We believe growth deceleration is the prime risk throughout 2019 although China and the US are likely to strike a deal to end the tariff war in the coming March.

Auto sales closed 2018 at 17.2 million units, virtually unchanged from the previous year. Robust economic growth has been the main driver of auto sales. Going forward, higher interest rates and a higher supply of “off-leasing” vehicles will exert downward pressures on demand for new vehicles. Retailers are expected to focus on the more lucrative “used vehicle” segment.

Markets were in a positive mood for the second week in a row. Recent news of further US-China trade talks by late January, coupled with China’s latest measures to boost its economy were the main drivers. The rejection of May’s Brexit plan and the vote of confidence that May was able to win have had only a mild impact on markets so far, awaiting for a Brexit "plan B”.

Highlights: BIS issues final standard for capital requirements for market risk. SRB issues the second part of its MREL Policy for 2018. EBA issues guide on exposures associated with high risk. ESAs present agreement on exchange of information between ECB and AML/CFT authorities. ESMA issues report on accepted market practices under MAR.

The positive tone in financial markets faded somewhat after the announcement of the US's investigation of Huawei for potential spying on US business partners, offsetting the positive effect of the announcement of further US-China trade talks that will take place on 30-31 January. Elsewhere, May managed to win the no-confidence vote, but the challenging context remained

Financial markets were in a positive mood, although the focus remained on the UK. After yesterday's defeat in the parliamentary vote on May’s Brexit deal - by a huge margin - the scenarios around Brexit remain very open. The next milestone will be today’s no confidence vote on May, with the arithmetic in her favour.

The Central Bank (CBRT) kept its policy rate (one-week repo, 24%) unchanged in line with expectations. We consider the decision as the right one as it supports the disinflation path and reinforces credibility. In our view, the CBRT should wait for June (when the recovery in inflation becomes more obvious) to start an easing cycle.

Financial markets seemed to digest positively the recent announcement from China of potential stimulus measures – such as tax cuts - in order to support its economy amid the release of recent weak Chinese economic data. Investors’ focus will be mainly on today’s result of the vote in the UK parliament on May’s Brexit deal as the future UK-EU relationship is uncertain

The purpose of this report is to present some of the most important drivers and implications of a declining fertility rate in the U.S. According to the U.S. National Center for Health Statistics (NCHS), the general fertility rate -number of births per 1,000 women aged 15 to 44- declined to 60.3 in 2017.

Cautious mood in markets caused by fears of global slowdown, mainly after the release of disappointing Chinese trade figures, and despite last week’s progress in US-China trade talks. Key global markets’ drivers for this week: in the US, the start of the 4Q18 earnings season coupled with economic data. Also, all eyes will be on tomorrow's Parliamentary vote on Brexit deal

IP fell by 6.5% yoy in calendar adjusted terms in November, disappointing the expectations (BBVA: -5.8%, Consensus: -5.4%). Our monthly GDP indicator nowcasts a contraction of 1.6% yoy growth in December (with 32% info), which is still consistent with our 3% 2018 GDP growth estimate but with some downside risks. We maintain our 2019 GDP growth forecast at 1%.