BBVA Research

Markets have started 2019 on the wrong foot, as doubts about China’s economy added to the already deteriorated environment in which the market ended 2018. The release of worse-than-expected confidence indices for China extended the risk-off mood in markets as it increased the odds of a potential global slowdown, triggering demand for safe-haven assets across the board.

Many individuals and households experience moments of financial difficulty, prompted either by a personal shock, such as losing a job, or an economy-wide shock, such as a recession. Financial resilience is key for consumer welfare and the formal financial system plays an important role.

Galicia has been, in recent years, one of Spain's most dynamic regional economies. According to data from Spanish Regional Accounting, it is the region with the third highest cumulative growth between 2015 and 2017. Thus, it is just below Catalonia and Murcia, and above others such as Madrid, Castile-La Mancha and the Balearic Islands.

The high volatility and sharp falls in stock markets which have been dominating global markets these past few days leave a bitter year-end taste and raise quite a few questions for 2019. This past year 2018 was never going to be easy, with the environment of abundant liquidity and low interest rates drawing to a close.

After a year (2017) that had been very positive for the world economy, especially in light of the strong recovery in international trade, the start of 2018 augured well for the year thanks to the momentum from 2017 and the cyclicalcoming together of the three major regions, USA, Europe and China.

High volatility in the financial markets, leading to significant falls in equity markets during the week. Risk aversion dominated early in the week, when US equity indices registered sharp losses. However, the after-Christmas rally in US markets contributed to improving the mood in financial markets slightly and allowing US markets to end the week in positive territory

The main results of ENIF 2018 (the National Survey on Financial Inclusion 2018) are being presented, and the situation and challenges that the government of AMLO and the financial institutions will face with regards to inclusion and financial education. 47.1% of the population has a bank or financial account (savings), 31.1% credit or credit card and 25.4% insurance.

Highlights: Working group on risk-free assets consults on transition from EONIA to ESTER. ESMA consults on Central Securities Depositories Regulation. Spanish government finalises transposition of MIFID II. US Agencies approve a capital phase-in for new accounting standards.

The Colombian economy has remained robust amid turmoil in markets. As a result, some assets, such as sovereign debt and risk premiums, have not been impacted by these fluctuations, and only the exchange rate registered a slight depreciation. High oil prices and the reduction of external imbalances in recent years helped the economy to be more resilient.

US stocks recovered yesterday, regaining some of the ground lost in the pre-Christmas session’s fall. The main US indices rose around 5% while volatility decreased to levels below 30% during the session. Nonetheless, the rebound seems to be only temporarily as US indices are showing losses again and volatility returned above 30%.

This paper presents econometric evidence on the determinants of domestic and cross-border e-commerce in Spain based on BBVA anonymised data. The paper applies the gravity model of trade to explain online credit card payment flows, using all private customer transactions of BBVA for Spain.

Recent sell-off in main equity indices contributed to extend the ongoing risk-off sentiment across the board, especially focused on the US market. However, post-Christmas trade is showing a mild recovery in markets, at least in those which opened today, as European bond and equity markets remained closed today.

In 2018, the financial regulatory reform approved after the crisis by the G20 and the Financial Stability Board (FSB) was considered virtually complete and the focus was supposed to be on implementing the reforms already initiated.

Global economy. Mexico, Economic Activity. Downward rigidity of core inflation and restrictive stance of Banxico. 2019 public accounts and budget. External accounts. Domestic assets are being affected by the new administration’s decisions.

An update of the National Survey of Financial Inclusion (ENIF 2018) is published. Reduction in the amount of subsidies for the acquisition of new housing in 2019 will be reflected with less building. The decisions of the new administration influenced the negative differentiation of domestic assets.

According to our MICA model the Eurozone could grow around 0.4% QoQ in 4T18. However, low global demand and high uncertainty are weighing on activity. Hard data improved during October driven by lower inflation, higher wages, increasing production in capital goods and rise in exports. Nevertheless, confidence indicators are worsening by year end.

A cautious mood prevailed in financial markets, in a week full of monetary policy meetings. High volatility on financial markets and sharp falls in both oil prices and risk assets were the main highlights.

Highlights: EC publishes a set of unilateral absolute minimum contingency measures to prepare for a no-deal brexit. Several EU and UK agencies publish documents in relation to brexit. EC welcomes agreement on the NPLs package. Spanish Ministry of Finance proposes to establish a macroprudential authority. Federal Agencies proposes to soften stress testing requirements.

The crisis has brought with it a notable increase in public debt in the countries affected, especially intense in the peripheral countries of the euro zone. The Greek crisis has fuelled a debate on the treatment of debt holdings in banking regulation and its consideration as a risk-free asset.

Twenty-five years after the 1994 crisis, the minimum wage will finally regain its real level and even exceed it.