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ECB Watch: The end of QE and caution for the future

December 14, 2018
The ECB confirmed that it will end the net asset purchases at the end of the month, after almost four years. Minor changes in the outlook, but more cautious due to growing downward risks.

Quo vadis, Brazil?

December 14, 2018
The next government is expected to propose measures to tackle the fiscal imbroglio and other problems, but there are doubts about its capacity to implement reforms given the fragmentation of Congress and political polarization. All in all, the economy is likely to grow around 2% in the coming years.

Market Comment | The positive mood continues, while the ECB announced the end of QE

December 14, 2018
Financial markets continue their recovery trend across the board, with the main focus on Europe. The recent improvement in relations between the US and China contributed to improving the mood . The ECB meeting and fresh news in euro-area politics were the main events today.

Turkey | The CBRT gives a stronger message

December 14, 2018
The Central Bank (CBRT) kept its policy rate (one-week repo, 24%) unchanged parallel to the expectations. We maintain our view that the CBRT could wait to deliver the first rate cut around the summer, when inflation starts to come down more obviously on base effects, easing exchange rate pass-thru, deeper negative output gap and declining cost push factors.

All things come to an end, but is the U.S. headed for recession?

December 13, 2018
Predicting a recession. Severity and duration of the next recession. Policy response.

Market Comment | Markets benefited from potential easing in trade tensions

December 13, 2018
The mood in markets continued to improve amid the release of the Huawei CFO, coupled with comments from Trump announcing his intention to intervene in the case if necessary. China’s willingness to open its markets to foreign companies also weighed. However, the news announcing a vote of confidence on May, warrant the uncertainty. Tomorrow’s focus will be on the ECB meeting

Navarre Economic Outlook 2018

December 12, 2018
The economy of Navarre grew 2.8% in 2017 and will keep that pace this year, moderating to 2.6% in 2019. The unemployment rate will reduce to 8.1% in 2019, although some risks are more likely to materialize than before. In 2019 employment in Navarre will be 2.3 p.p. under the 2008 level. Better and stronger job creation remains as a challenge.

Mexico | Business loans continue to be the main source of bank credit expansion

December 12, 2018
In October 2018, the nominal annual growth rate of the balance of the current loan portfolio granted by commercial banks to the private sector was 11.8% (6.5% real). This rate was greater to the previous month (11.2%) and lower than the same month of 2017 (12.5%).

Market Comment | Risk assets recovered amid optimism on US-China trade relations

December 12, 2018
Prices of main risk assets recovered, improving the mood in financial markets after the recent positive developments in the US-China trade talks. The surrounding concerns were overshadowed by a potential tariff cuts on US cars imported by China. However, concerns remained among investors, with eyes on the upcoming developments on Italy’s budget and Brexit negotiations.

What will be the trends in payments next season?

December 11, 2018
Autumn is traditionally the season when payments become a central topic in banking conversations. One of the main reasons for that is SIBOS, the global event organised by SWIFT that once a year gathers payment experts and financial companies at a different venue to talk about recent and next breakthroughs and trends that will shape the payments industry in the coming years

China’s corporate sector: Deleveraging or re-leveraging?

December 11, 2018
In face of intensifying growth headwinds and private enterprises woes, the authorities have shifted their policy stance from "deleveraging" to "stabilizing firm's leverage". Stimulating growth and controlling debt at the same time is a challenging task, the authorities could achieve a balanced objective if appropriate policy initiatives are to be implemented.

Market Comment | Sell-off continued in risk assets ahead of an eventful week. ECB Preview

December 11, 2018
Financial markets remained in a risk-off mood as concerns over US-China relations continued in the spotlight. Moreover, the latest news announcing a delay to the parliamentary vote on a Brexit deal added more pressure on UK assets, spreading concerns to other markets. This week the focus will be on Thursday’s ECB meeting and new developments on Brexit and Italy’s budget

Country Risk Quarterly Report. Fourth Quarter 2018

December 11, 2018
The bet of financial markets on ratings downgrades remain for countries where agencies have already taken recent actions (Argentina, Italy, Turkey). A bias towards a slower Fed's normalization process is supportive for EM ratings; however, protectionism (and its impact on China) is the main risk ahead for EM assets

Turkey | Sharper than expected adjustment in 3Q GDP

December 10, 2018
Turkish Economy grew by 1.6% in yoy in 3Q18, failing to satisfy expectations (2.2% Consensus and BBVA-Research). Quarterly growth rate (sca) realized as -1.1%, which signals that adjustment in the economy becomes faster and is likely to deepen further. We maintain our GDP growth estimate at 3% for 2018, while risks are on the downside for our 2019 growth forecast of 1%.

The G20 should stop just taking note sooner rather than later

December 10, 2018
Last Saturday the G20 summit was held in Argentina. What better opportunity to discuss the trade war than the meeting of representatives of countries that account for more than 75% of global growth, investment and trade.

Market Comment | Risk-off mood drove financial markets at the end of the week

December 8, 2018
Risk-off mood at the end of the week as increasing trade fears, volatility in oil prices and doubts about US economic growth weighed. The detention of a Chinese tech manager at the request of the US fuelled concerns about worsening relations. These events dispelled the positive mood after the G20 summit, in which China and the US reached a trade truce.

Financial Regulation: Weekly Update. 7 December 2018

December 7, 2018
Highlights: Eurogroup and EU Council reach a minimal agreement on Monetary Union reform and Banking Union completion. EU Commission and EU Council welcome political agreement reached on the Banking Reform Package. Responding to industry’s concerns, ESAs allow proportionate application of STS securitizations regulation by national authorities.

Market Comment | Oil prices remained steady ahead of tomorrow’s OPEC meeting

December 6, 2018
Financial markets remained cautious after yesterday's sell-off in the US. The latest comments from China announcing its optimism on reaching a trade deal with the US were not enough to offset the negative mood, along with early doubts on US economic growth. Moreover, crude oil prices remained steady with investors waiting for the outcome of tomorrow’s OPEC meeting.

Geo-World: Conflict & Protest. November 2018

December 6, 2018
The conflict in the Black Sea region between Russia and Ukraine escalated in November over the Kerch Strait. The situation has been contained for now, but it is still fragile. US and China agreed on a truce in their trade war, which brought a relief to the markets.

Eurozone | A measure of supercore inflation for the eurozone

December 6, 2018
We develop a supercore inflation measure following the methodology proposed by the ECB that provides an early indication of turning points in underlying inflation. The measure is built for the Eurozone as a whole and for its large economies. Results show that inflation pressures are moderating in the euro area with diverging trends for core and periphery countries.