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Updated: 10 hours 55 min ago

Financial Regulation: Weekly Update. 22 February 2019

February 22, 2019
Highlights: Spanish Congress approves law regarding mortgage loans. ESMA will recognise UK CCPs in a no-deal Brexit. SRB issues framework for valuation in resolution. ECB publishes feedback on EONIA transition to ESTER. EBA releases consumer trends report. FRB extends comment period for stress test consultation. Agencies extend comment period for SA-CCR proposal.

Market Comment | Central Banks minutes had mild impact on markets

February 22, 2019
Calm in markets amid two days of high-level trade talks that started today, but now in the US, followed by the Liu He - Trump meeting tomorrow. Meanwhile, all eyes are on the release of multiple Memoranda of Understanding (MoU) which will detail key issues and agreements. On the other hand, the minutes from the ECB and the FOMC held the attention of investors

Upcoming changes in the ECB executive board that could change monetary policy future

February 22, 2019
In 2019, the ECB faces a broad reshuffle of its key positions that could change monetary policy future. The first change in executive board has been the substitution of Peter Praet by Philip Lane as chief economist. Using NLP techniques we monitored the ECB members’ speeches to disentangle the contents, as well as the tone, which is related to hawkish/dovish stances.

Mexico | How do we tackle the Pemex situation?

February 21, 2019
Recently, especially in the aftermath of Fitch downgrading Pemex's rating from BBB+ to BBB-, there has been nervousness in the markets because Pemex's situation is perceived as a significant risk to the country's macroeconomic stability.

Mexico | February CPI HoH forecast: pico de gallo will drive down headline inflation

February 21, 2019
Core inflation will likely ease slightly as we anticipated.

Market Comment | Optimism in markets with the focus on Central Banks minutes

February 21, 2019
Positive tone in markets ahead of the release of the FOMC minutes later today. The optimism from the US on trade negotiations and the willingness to delay the March 1st trade truce deadline weighed on markets. Yesterday, as part of the trade deal, the US asked China to keep the yuan stable. Afterwards, China reaffirmed its commitment to maintain its prudent monetary policy

Global Funds Outlook. First quarter 2019

February 20, 2019
Global Investment Funds (GIF) flows have been on a roller coaster ride since the start of Q418. Sharp pullback in portfolio flows in late 2018, focus on DMs, but since the start of this year, GIFs inflows recovered particularly to EMs. Looking ahead, EMs would continue to outperform DMs over the short term although hinged on Fed and progress on US-China trade dispute.

Market Comment | Financial markets little change ahead of tomorrow's FOMC minutes

February 20, 2019
There have been slight movements in the financial markets, pending the publication of the FOMC minutes and further details over the ongoing US-China trade negotiations. Following last week’s trade talks in Beijing, further negotiations between the two major economies started today in the US, while high-level meetings will take place once again at the end of the week

Castile and Leon Economic Outlook 2019

February 19, 2019
The economy of Castile and León Aragon may have grown 2.2% in 2018, and will reach 2.3% in 2019, to moderate to 1.9% in 2020. It will create over 35,000 new jobs by 2020, although some risks are more likely to materialize now, than they were some months ago. Total employment will be still far from its pre-crisis level. Inclusive growth is a challenge.

Market Comment | Calm in markets with Central Banks and trade on center stage

February 19, 2019
Quiet start of the week in markets with a low trading volume as US markets remained closed due to the Presidents’ Day. Following last week’s positive tone, thanks to the avoidance of the US government shutdown and the US-China trade negotiations, markets remain focused on this week’s trade talks. On another note, the release of the ECB and FOMC minutes will be key

How much will Europe's economy slow down?

February 18, 2019
The strong downward revision of economic forecasts published by the European Commission last week had a substantial impact on the financial markets, leading to questions about whether the evident slowdown that we are currently experiencing could be more serious than previously thought and culminate in some kind of recession.

The Central Bank of Turkey relies on Macro-Prudential and Communication policies

February 18, 2019
The CBRT decided to reduce the RRR in Turkish Lira and increase the upper limit of ROM facility for holding standard gold converted from wrought or scrap gold. Rather than considering the decision as an early sign of an interest rate cut, we perceive the decision as the logical response to stimulate credit but avoid a premature rate cut which could put credibility at risk.

Mexico | The measures announced today do not solve Pemex's structural problems

February 16, 2019
Pemex buys time with financial support measures from the government, but the company’s credit rating continues at risk. To stabilize crude oil production and eventually increase it, the approved investment of MXN 273,000 million for 2019 should double and be mostly used for E&P.

Market Comment | Ups and downs in markets with trade and global outlook as key points

February 16, 2019
Last week’s increase in volatility was overshadowed by the positive tone in financial markets on the back of optimism about global trade ahead of US-China trade talks. Cautious sentiment appeared  amid weak economic data but it was partially offset by today’s announcement of the extension of trade talks and the US Congress’ deal, which will avert another shutdown in the US

Financial Regulation: Weekly Update. 15 February 2019

February 15, 2019
Highlights: EU ambassadors conclude CRDV negotiation. FSB issues its 2019 work programme. EMMI publishes summary of responses to Euribor consultation. EC issues list of countries with weak AML/CFT. EDPB issues opinion on data transfer. ESRB issues recommendations on reciprocation of large exposure limits. US Treasury issues statement on the US-EU Financial Regulatory Forum

Market Comment | Weak economic data offset optimism on trade talks

February 15, 2019
The positive tone in markets faded after the release of disappointing economic data, while high-level US-China trade talks started today. The potential extension of the March 1st trade truce deadline continued to weigh on investors’ optimism on the trade relation developments. Meanwhile, today the US Congress will vote on the spending bill that will avoid another shutdown

Turkey | Downside surprise in Industrial Production (IP)

February 14, 2019
Industrial Production (IP) surprised on the downside by falling 9.8% yoy in calendar adjusted terms in December (-8.4% BBVA Research vs. -7.5% Consensus). Thus, IP contracted by 7.5% in 4Q18 after its 1.6% growth in 3Q18. We maintain our view that the recovery in economic activity could start as of 2Q19 and bring the whole year GDP growth rate to 1% in 2019.

Market Comment | Markets remained optimistic regarding US-China trade talks

February 14, 2019
Financial markets continued with a positive sentiment driven mainly by the optimism on the US-China trade relationship and the potential to avert another US government shutdown. Hopes for an ease in trade frictions rose after Trump said that the March 1st deadline to increase tariffs on Chinesse imports could be delayed if progress is made during the upcoming trade talks

Spain Regional Watch. First quarter 2019

February 13, 2019
The improvement in tourism and consumption in the fourth quarter eases the slowdown in the Levante. However, the trend is still marked by an external context favorable to exports of goods and a lower dynamism of household spending.

Andalusia Economic Outlook. First half 2019

February 13, 2019
The economy of Andalusia would have grown by 2.3% in 2018. The recovery will continue in 2019 and 2020, with a GDP growth of 2.3 and 1.9%. 140,000 jobs will be created by the end of 2020, although some risks are more likely now than a few months ago. The unemployment rate and unemployment will continue far from pre-crisis. Inclusive growth is a challenge.

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