Italy: fundamentals are the compass amid political twists
|
|
- Shannon Phelps
- 5 years ago
- Views:
Transcription
1 Italy: fundamentals are the compass amid political twists Eric Brard Head of Fixed Income Annalisa USARDI, CFA Senior Economist With the contribution of: Giuseppina Marinotti Investment Insights Unit The contract between the two parties will be the wish list of the new government. Uncertainty remains on how it will be executed and on implications on public finance targets. 1 A new Government: After three months of deadlock, 5Star Movement and the League agreed on a redesigned Government formation. Prof. Conte was again designated as Prime Minister. The contract between the two parties will be the wish list of the new government but uncertainty remains on how it will be executed and on implications for public finance targets. Economy: The macro-environment that Italy is facing is much more positive than the one during the Euro Sovereign Debt Crisis in 2011: In Q1 2018, Italy has enjoyed expansion for 15-quarters in a row. Overall, we still think that the economic fundamentals remain positive, yet we acknowledge that the current situation may significantly disturb business and consumer confidence. Overall, this is the key thing to watch to identify early signals in activity. Strengths and weaknesses: From the financial point of view, Italy s main problem is the high level of government debt, although the high average maturity (6.8 years) somewhat protects it from a sudden transmission of higher interest rates into debt dynamics. Private sector debt is one of the lowest of the Eurozone. Household and corporate financial vulnerability would remain limited even in the case of a rise in interest rates. The Italian banking system soundness has increased: The share of NPLs (Non-Performing Loans) in banks' balance sheets is declining progressively, especially for banks that have made largescale disposals. Fixed Income: Going forward, the level of volatility will continue to be influenced by the news flow and will probably stay high until some crucial issues, especially in terms of fiscal budget, become clearer. We expect the ECB to stick to its mandate and agenda. Our central scenario is a progressive reduction of purchases for an end in December For the time being, we prefer to keep a cautious approach, and be very flexible (in duration and risk exposure) as conditions can rapidly evolve. It is too soon to step in, but we will clearly look for the right time over the course of the summer to enter the market. What is the recent evolution of the Italian political crisis? Usardi. After three months of deadlock, on 31st May, the two leading parties the 5Star Movement and the League - agreed on a redesigned Government formation. Prof. Conte was again designated as Prime Minister. He presented the list of Ministers, removing the obstacle that stopped previous government formation attempts. The most controversial figure (Paolo Savona, economist, whose nomination as Minister of Economy and Finance caused previous attempts to form a government to fail) was moved to another ministry, while some key ministries remained non-political, albeit held by experienced figures in previous governments (e.g. Minister of Economics and Finance, Giovanni Tria, over the years has served as a senior advisor in various ministries such as Economics and Finance, Foreign Affairs, Public Administration, Labour). Both leaders of the coalitions (L. Di Maio and M. Salvini) have a role as both Ministers and vice Prime Minister. Since that date, the Government has his full powers and should get the confidence vote in the coming hours, with the support granted by the votes of the M5S, the League and some senators of the Gruppo Misto in the Senate (where the majority by the M5S and the League would be slim). The contract between the two parties will be the wish list of the new government, but uncertainty remains on how it will be executed and on implications on public finance targets. What is your assessment of the Italian economy? Usardi. The macro-environment that Italy is facing is much more positive than the one during the Euro sovereign debt crisis in On the fundamental macro front, at the beginning of the year, we expected the positive momentum of 2017 to be carried over into 2018 (albeit with some moderate growth) maintaining output growth well above potential. Growth and recovery INVESTMENT TALKS 5 June 2018
2 In Q1 2018, Italy has enjoyed expansion for 15-quarters in a row, and experienced a somewhat extraordinary growth at 1.5% YoY in 2017, well above the estimated potential. were well under way so far: as of Q1 2018, Italy has enjoyed expansion for 15-quarters in a row, and experienced quite extraordinary growth at 1.5% YoY in 2017 (vs less than 1% in 2016), well above the estimated potential. This performance was supported by all the growth engines and especially by the recovery in capital goods investments, which is accelerated compared to the past two years and broad based across sectors and capital goods. Support came also from personal consumer goods, with a sustained pace of growth thanks to upbeat confidence; and finally net exports benefitted from the expansion in global output and trade, supported by increased competitiveness. The positive environment created by the ECB monetary policy helped to sustain the recovery. Value added increased in all sectors, in particular in the industrial manufacturing sector. The slack in labour market was gradually absorbed, although the unemployment rate still remains around 11%. Overall, we still think that the fundamentals of the economy remain positive, yet we acknowledge that the current situation may significantly disturb business and consumer confidence, therefore affecting the real economy through deferral in investment and consumption decisions. Overall, this is the key thing to watch to identify early signals on activity. What are the country s main vulnerabilities? From the financial point of view, Italy s main problem is the high level of government debt, while the private sector debt is not of concern. Government finance is slowly getting better (public debt to GDP in 2017 was 131.8% - in 2016 it was 132%, a small decrease but with commitment to decrease further); deficit to GDP in 2017 was 2.3% (vs 2.5% in 2016) with an objective for 2018 of 1.6% (-0.7% vs 2017). In the plans, a progressive decrease of deficit was projected to reach a balanced budget in 2020 and a small surplus on Italy runs a primary surplus at 1.5% of GDP, stable vs 2016, with fiscal pressure on average decreasing from 42.7% to 42.5% in The high level of government debt represents a risk, although the high average maturity (6.8 years) somewhat protects it from a sudden transmission of higher interest rates into debt dynamics. The ratio of non-domestic holders was 33.2% in April The high level of government debt represents a risk, although the high average maturity (6.8 years) somewhat protects it from a sudden transmission of higher interest rates into debt dynamics. The debt issue and concerns on fiscal deterioration 210% Debt/GDP ratio (%) 180% 150% 120% 90% 60% 30% 0% SURPLUS DEFICIT 4.0 Deficit/GDP ratio (%) Source: Amundi, as of June Household debt is among the lowest within the Eurozone, at 60% of disposable income (vs France and Germany approx. 80%, Spain 100%) and delinquency rates are low; vulnerable debt is around 11.4% vs 24.2% in 2008 and stress test simulations by the Bank of Italy predict that +100 basis points 1 (bps) on interest rates moves vulnerable debt to 12.4%, +200 bps moves vulnerable debt to 13.4%. Their financial vulnerability would remain limited even with a sharp rise in interest rates. Companies leverage is now down to 40% (France and Germany 32% and 37% respectively) with a marked decline in debt held by vulnerable companies (45% in 2012, down to 32% in 2016, expected at 28% in 2018). Stress test simulations by the Bank of Italy would imply that this ratio would still be in decline even with +100 bps increase, while +200 bps would move debt held by vulnerable companies to 32%). The continued economic recovery 1 Basis point (bps) refers to a common unit of measure for interest rates. One basis point is equal to 1/100th of 1%, or 0.01%. 2
3 supports corporate profitability, reducing businesses vulnerability. Yet, fragilities persist among small firms and in the construction sector. Private sector debt (% of GDP) one of lowest in the EU Source: Amundi, as of June Italy Ireland Germany France Spain Portugal Euro area Households Non-financial firms Overall, Italy s banking system has satisfactory levels of liquid assets to weather even very large increases in risk-free interest rates. Since the last crisis the supervision of the banking sector has been strengthened and unified under the ECB supervisory role and falls under the project of the European Banking Union. Banking sector has been under pressure in the last few weeks. What are banking sector conditions? Referring to the Bank of Italy Financial Stability Report of April 2018, the Italian banking system s soundness has increased. The quality of bank credit has been improving steadily. Flows of non-performing loans (NPL) have now returned to levels comparable to pre-crisis levels. The share of NPLs in banks' balance sheets is declining progressively, especially for banks that have made large-scale disposals. Several capital increases narrowed the gap in capital strength compared to the average in other European countries. Furthermore, bank profitability is improving, yet, it is still assessed to be quite poor for many small and mediumsized banking institutions. Overall, Italy s banking system has satisfactory levels of liquid assets to weather even very large increases in risk-free interest rates. The Bank of Italy has performed stress test of the sectors to assess resilience to interest rates shocks. Three scenarios in which risk-free interest rates rise by 100, 200 and 300 basis points (bps) over the entire yield curve have been examined, assuming constant risk premiums (vs base scenario as curve levels out at the end of January 2018). The results show that even in the worst case scenario, where the system s average loan coverage ratio declines from 172% to 143%, it still remains above the regulatory minimum of 100%. Assuming a 100 bps rise in risk-free interest rates, 2.6% of banks would fall below the threshold, representing 2.7% of total assets. Assuming 200 bps rise, 4.3% of banks would fall below the threshold, representing 5.0% of total assets. Assuming 300 bps rise, 4.6% of banks would fall below the threshold, representing 5.4% of total assets. What has changed regarding the European financial sector since the last European crisis? The Euro area debt crisis made it clear that deeper integration of the banking system was needed for the Euro area countries, given their interdependence. Since 2011, the ECB and the Eurozone have shown commitment to actively prevent and manage financial stability with a number of tools: The European Stability Mechanism (ESM) has been established as a permanent crisis management mechanism, the ECB has extensively used its balance sheet to purchase assets and some progresses have been made towards the Banking Union. Since the last crisis, the supervision of the banking sector has been strengthened and unified under the ECB supervisory role and falls under the project of the European Banking Union. The Banking Union roadmap is based on three pillars. The first two pillars are now fully operational, the single supervisory mechanism (SSM) and a single resolution mechanism (SRM) for banks, which strengthen and unify the supervision of major banks in all member countries. The third pillar was proposed by the European Commission, as a further step toward the Banking Union, (in Nov 2015): The European deposit insurance scheme (EDIS) to provide stronger and more uniform insurance cover for all retail depositors in the Banking Union. EDIS would provide a 3
4 stronger, more uniform degree of insurance cover in the Euro area, reducing the vulnerability of national deposit guarantee schemes to large local shocks and ensuring that the level of depositor confidence in a bank would not depend on the bank s location. It s important to have a strategy to face this uncertain phase, and the most appropriate one in our view is to relying on fundamentals. In fixed income, what do you expect in terms of market volatility? Brard. While the peak of the Italian institutional crisis seems over, the new government will have to deal with a number of challenges and the market will closely monitor actions and decisions that will be taken to implement the contract signed by the parties leaders. Going forward, the level of volatility will continue to be influenced by the news flow and will probably stay high until some crucial issues, especially in terms of fiscal budget, will be clearer. It s important to have a strategy to face this uncertain phase, and the most appropriate one in our view is to rely on fundamentals. This was a political crisis, but Italy has a number of favourable parameters. These positive factors will continue to help mitigate the turbulence created by political twists. What is your view on ECB policy in this context? Brard. The ECB is not to be considered the deus ex machina in this matter, and we should expect the ECB to do the Central Bank job maintaining price and financial stability and not reacting to political crises. We expect the ECB to stick to its mandate and agenda: The ECB should formally announce soon how it intends to end its purchasing program. Our central scenario is a progressive reduction of purchases for an end in December Despite the Q1 softening, the current economic expansion is still sustained in Italy and in other Euro Zone countries. It will be important to look at business and consumer confidence indicators in the coming weeks to see to what extent the soft patch is taking shape and on Italy, if the political crisis has weakened confidence. While we remain in a wait and see attitude for the moment, we expect that the positive fundamentals in the Eurozone could soon pave the way for interesting opportunities going forward. How should investors deal with the current uncertain phase? Brard. For the time being, we prefer to maintain a cautious approach, and be very flexible (in duration and risk exposure) as conditions can rapidly evolve. The overall assessment of current situation is somehow mitigated looking at the two layers, Italy and the Eurozone. The landscape in the Eurozone is very different from Europe is in a different phase of the economic cycle, growth is now solid and broad-based. Interest rate figures are very different as well: 10y Italian sovereign yields were just above 3% in the middle of the institutional crisis, in November 2011 they went above 7%. The Bank of Italy was recently reminding us that the cost of debt is around 3% and most of the curve is below 2.5%. And overall, the spillover to the other European markets has been contained. While we remain in a wait and see attitude for the moment, we expect that the positive fundamentals in the Eurozone could soon pave the way for interesting opportunities going forward. As we said, we will continue to monitor the political situation, the economic figures (in particular developments in debt), investors attitude and liquidity conditions. Liquidity conditions are very important in volatile phases: liquidity pressure during the sell-off of Italian assets contributed to generate market dislocations. It is important to have a set of policies regarding liquidity to try to protect investors against liquidity black holes. In conclusion, it is too soon to step in, but we will clearly look for the right time over the course of the summer to enter the market. 4
5 Important Information Unless otherwise stated, all information contained in this document is from Amundi Asset Management and is as of June 4, The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management, and are subject to change at any time based on market and other conditions and there can be no assurances that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, as securities recommendations, or as an indication of trading on behalf of any Amundi Asset Management product. There is no guarantee that market forecasts discussed will be realised or that these trends will continue. These views are subject to change at any time based on market and other conditions and there can be no assurances that countries, markets or sectors will perform as expected. Investments involve certain risks, including political and currency risks. Investment return and principal value may go down as well as up and could result in the loss of all capital invested. This material does not constitute an offer to buy or a solicitation to sell any units of any investment fund or any services. Date of First Use: 5 June AMUNDI INVESTMENT INSIGHTS UNIT The Amundi Investment Insights Unit (AIIU) aims to transform our CIO expertise, and Amundi s overall investment knowledge, into actionable insights and tools tailored around investor needs. In a world where investors are exposed to information from multiple sources we aim to become the partner of choice for the provision of regular, clear, timely, engaging and relevant insights that can help our clients make informed investment decisions. Discover Amundi investment insights at our website 5
Eurozone Economic Watch Higher growth forecasts for January 2018
Eurozone Economic Watch Higher growth forecasts for 2018-19 January 2018 Eurozone Economic Watch January 2018 Eurozone: Higher growth forecasts for 2018-19 Our MICA-BBVA model estimates a broadly stable
More informationEurozone. EY Eurozone Forecast June 2014
Eurozone EY Eurozone Forecast June 2014 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Luxembourg Malta Netherlands Slovakia Slovenia Spain Outlook for exits bailout,
More informationEurozone Economic Watch. April 2018
Eurozone Economic Watch April 2018 Eurozone: solid growth and broadly unchanged projections, with protectionist risks BBVA Research - Eurozone Economic Watch / 2 Confidence has weakened in 1Q18 since the
More informationAPPENDIX: Country analyses
APPENDIX: Country analyses Appendix A Germany: Low economic momentum The economic situation in Germany continues to be lackluster in 2014. Strong growth in the first quarter was followed by a decline
More informationSpring Forecast: slowly recovering from a protracted recession
EUROPEAN COMMISSION Olli REHN Vice-President of the European Commission and member of the Commission responsible for Economic and Monetary Affairs and the Euro Spring Forecast: slowly recovering from a
More informationEurozone. Economic Watch FEBRUARY 2017
Eurozone Economic Watch FEBRUARY 2017 EUROZONE WATCH FEBRUARY 2017 Eurozone: A slight upward revision to our GDP growth projections The recovery proceeded at a steady and solid pace in, resulting in an
More informationEurozone Economic Watch. May 2018
Eurozone Economic Watch May 2018 BBVA Research - Eurozone Economic Watch / 2 Eurozone: more moderate growth with higher uncertainty The eurozone GDP growth slowed in more than expected. Beyond temporary
More informationThe New Global Economic Order Multilateral Institutions and the New Regionalism
The New Global Economic Order Multilateral Institutions and the New Regionalism India Global Forum, New Delhi, 9 November 2014 Klaus Regling, Managing Director, European Stability Mechanism Over the past
More informationEurozone. EY Eurozone Forecast September 2014
Eurozone EY Eurozone Forecast September 2014 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Luxembourg Netherlands Portugal Slovakia Slovenia Spain Outlook for Stronger
More informationEurozone Ernst & Young Eurozone Forecast Spring edition March 2012
Eurozone Ernst & Young Eurozone Forecast Spring edition March 2012 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain
More informationEurozone Economic Watch. November 2017
Eurozone Economic Watch November 2017 Eurozone: improved outlook, still subdued inflation Our MICA-BBVA model for growth estimates for the moment a quarterly GDP figure of around -0.7% in, after % QoQ
More informationThe real change in private inventories added 0.22 percentage points to the second quarter GDP growth, after subtracting 0.65% in the first quarter.
QIRGRETA Monthly Macroeconomic Commentary United States The U.S. economy bounced back in the second quarter of 2007, growing at the fastest pace in more than a year. According the final estimates released
More informationEurozone. EY Eurozone Forecast September 2013
Eurozone EY Eurozone Forecast September 213 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for Germany
More informationEUROZONE ECONOMIC WATCH JANUARY 2017
EUROZONE ECONOMIC WATCH JANUARY 2017 Key messages: some changes for the better Improving confidence in across the board shows the resilience of the eurozone to the various potentially disturbing political
More informationASSESSING THE RISK OF A DOUBLE-DIP RECESSION: KEY INDICATORS TO MONITOR
Weekly Economic Perspective ASSESSING THE RISK OF A DOUBLE-DIP RECESSION: KEY INDICATORS TO MONITOR August 2, 2010 Robert F. DeLucia, CFA Consulting Economist Summary and Major Conclusions: Heightened
More informationFixed Income. EURO SOVEREIGN OUTLOOK SIX PRINCIPAL INFLUENCES TO CONSIDER IN 2016.
PRICE POINT February 2016 Timely intelligence and analysis for our clients. Fixed Income. EURO SOVEREIGN OUTLOOK SIX PRINCIPAL INFLUENCES TO CONSIDER IN 2016. EXECUTIVE SUMMARY Kenneth Orchard Portfolio
More informationGlobal Macroeconomic Monthly Review
Global Macroeconomic Monthly Review August 14 th, 2018 Arie Tal, Research Economist Capital Markets Division, Economics Department 1 Please see disclaimer on the last page of this report Key Issues Global
More informationLESS DYNAMIC GROWTH AMID HIGH UNCERTAINTY
OVERVIEW: The European economy has moved into lower gear amid still robust domestic fundamentals. GDP growth is set to continue at a slower pace. LESS DYNAMIC GROWTH AMID HIGH UNCERTAINTY Interrelated
More informationEurozone. Outlook for. Ernst & Young Eurozone Forecast. Summer edition 2012
Eurozone Ernst & Young Eurozone Forecast Summer edition 2012 Outlook for Published in collaboration with Andy Baldwin Head of Financial Services Europe, Middle East, India and Africa With key national
More informationPortugal Q Portugal. Lisbon, April 26th 2012
Q1 2012 Lisbon, April 26th 2012 Disclaimer 2 Banco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements within the meaning of the US Private Securities Litigation
More informationEurozone. EY Eurozone Forecast December 2013
Eurozone EY Eurozone Forecast December 213 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for Germany Strong
More informationIs the Euro Crisis Over?
Is the Euro Crisis Over? Klaus Regling, Managing Director, ESM Institute of International and European Affairs, Dublin 17 January 2014 Europe reacts to the euro crisis at national and EU level A comprehensive
More informationPostponed recovery. The advanced economies posted a sluggish growth in CONJONCTURE IN FRANCE OCTOBER 2014 INSEE CONJONCTURE
INSEE CONJONCTURE CONJONCTURE IN FRANCE OCTOBER 2014 Postponed recovery The advanced economies posted a sluggish growth in Q2. While GDP rebounded in the United States and remained dynamic in the United
More informationEurozone Economy Update
MACRO REPORT Eurozone Economy Update September 2015 Key Insights Monica Defend Head of Global Asset Allocation Research Andrea Brasili Senior Economist Global Asset Allocation Research Also contributing
More informationEurozone. EY Eurozone Forecast September 2013
Eurozone EY Eurozone Forecast September 2013 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for Ireland
More informationEurozone. EY Eurozone Forecast June 2014
Eurozone EY Eurozone Forecast June 214 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for Slovenia
More informationEurozone. EY Eurozone Forecast September 2014
Eurozone EY Eurozone Forecast September 214 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for Slovenia
More informationBCC UK Economic Forecast Q4 2015
BCC UK Economic Forecast Q4 2015 David Kern, Chief Economist at the BCC The main purpose of the BCC Economic Forecast is to articulate a BCC view on economic topics that are relevant to our members, and
More informationSpain Economic Outlook Q FIRST QUARTER. Economic Outlook. Spain. Economic Outlook. Spain
Economic Outlook FIRST QUARTER 2016 Spain Economic Outlook Spain The world economy will continue to grow, but at a slower pace than in the past and with more risks Spain's economy has started 2016 with
More informationProjections for the Portuguese economy in 2017
Projections for the Portuguese economy in 2017 85 Projections for the Portuguese economy in 2017 Continued recovery process of the Portuguese economy According to the projections prepared by Banco de Portugal,
More informationShort-term indicators and Updated Forecasts. Eurozone NOVEMBER 2016
Short-term indicators and Updated Forecasts Eurozone NOVEMBER 2016 EUROZONE WATCH NOVEMBER 2016 Key messages: resilience and unchanged projections The moderate pace of economic growth continued in the
More informationEurozone. EY Eurozone Forecast September 2014
Eurozone EY Eurozone Forecast September 2014 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for
More informationEurozone. EY Eurozone Forecast June 2014
Eurozone EY Eurozone Forecast June 2014 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for Finland
More informationITALY KEY FIGURES, TRENDS, STATE OF HEALTH. April 2013
ITALY KEY FIGURES, TRENDS, STATE OF HEALTH April 2013 Italy: Lost in stagnation??? 2 3 Italy weaknesses are well known GDP growth % change from previous year Public debt/gdp % Poor GDP growth High public
More informationEurozone. EY Eurozone Forecast September 2013
Eurozone EY Eurozone Forecast September 213 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for Greece Rising
More informationEurozone. EY Eurozone Forecast September 2014
Eurozone EY Eurozone Forecast September 2014 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for
More informationThe real change in private inventories added 0.15 percentage points to the second quarter GDP growth, after subtracting 0.65% in the first quarter.
QIRGRETA Monthly Macroeconomic Commentary United States The U.S. economy rebounded in the second quarter of 2007, growing at an annual rate of 3.4% Q/Q (+1.8% Y/Y), according to the GDP advance estimates
More informationMain Economic & Financial Indicators Poland
Main Economic & Financial Indicators Poland. 6 OCTOBER 2015 NAOKO ISHIHARA ECONOMIST ECONOMIC RESEARCH OFFICE (LONDON) T +44-(0)20-7577-2179 E naoko.ishihara@uk.mufg.jp The Bank of Tokyo-Mitsubishi UFJ,
More informationBelgium: Just not fast enough
Economic and Financial Analysis 17 May 2018 Article 17 May 2018 Belgium: Just not fast enough Global Economics For Belgium, 2017 was another recovery year which is definitively satisfactory but things
More informationGREECE: CLEAN EXIT, FOR WHOM?
Policy Brief April 3, 2018 GREECE: CLEAN EXIT, FOR WHOM? Lorenzo Codogno There seems to be a strong convergence of interests between the Greek government, the European Commission and Eurozone Member States
More informationMarket Insight Economy and Asset Classes December Oil Prices Downtrending: The Real Global Economic Stimulus
Market Insight Economy and Asset Classes December 2014 Oil Prices Downtrending: The Real Global Economic Stimulus 2 Equities Markets Feature In Citi analysts view, the expansion phase the US are enjoying
More informationEurozone. EY Eurozone Forecast March 2015
Eurozone EY Eurozone Forecast March 2015 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Slovakia Slovenia Spain Outlook for Modest
More informationEurozone. EY Eurozone Forecast March 2015
Eurozone EY Eurozone Forecast March 2015 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Lithuania Luxembourg Netherlands Portugal Slovakia Slovenia Spain Outlook for
More information1.1. Low yield environment
1. Key developments Overall, the macroeconomic outlook has deteriorated since June 215. Although many European countries continue to recover, economic growth still remains fragile reflecting high public
More informationEurozone. EY Eurozone Forecast March 2014
Eurozone EY Eurozone Forecast March 214 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for Estonia
More informationWeekly Bulletin November 20, 2017
US data bolster the case for a rate hike. WEEKLY OUTLOOK In the USA, inflation and retail sales in October recorded an upbeat tone. Annual consumer inflation picked up by 2%, while core annual inflation
More informationPIMCO Cyclical Outlook for Europe: Near-Term Recovery, Long-Term Risks
PIMCO Cyclical Outlook for Europe: Near-Term Recovery, Long-Term Risks September 26, 2013 by Andrew Balls of PIMCO In the following interview, Andrew Balls, managing director and head of European portfolio
More informationEurozone Economic Watch
BBVA Research - Global Economic Watch December 2018 / 1 Eurozone Economic Watch December 2018 Eurozone GDP growth still slows gradually, but high uncertainty could take its toll GDP growth could grow by
More informationremain the same until the end of 2018.
We predict that the European interest rate will remain the same until the end of 2018. Throughout the past three years the interest rate has remained low. In 2017 and 2016 it has been 0.00% and in 2015
More informationASSET ALLOCATION MONTHLY BNPP AM Multi Asset, Quantitative and Solutions (MAQS)
FOR PROFESSIONAL INVESTORS 4 June 2018 ASSET ALLOCATION MONTHLY BNPP AM Multi Asset, Quantitative and Solutions (MAQS) DIGESTING RISKS FROM ITALY, GLOBAL GROWTH AND EM Asset allocation overview: Christophe
More informationProject Link Meeting, New York
Project Link Meeting, New York October 22-24, 2012 Country Report: Italy from Rapporto di Previsione Ottobre 2012 (Economic Outlook, October 2012); Prometeia Associazione per le Previsioni Econometriche
More informationEurozone Ernst & Young Eurozone Forecast June 2013
Eurozone Ernst & Young Eurozone Forecast June 2013 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Ernst & Young
More informationEurozone Economic Watch. March 2018
Eurozone Economic Watch March 20 Eurozone Economic Watch March 20 Eurozone: The moderation of confidence continues We expect GDP growth to remain steady early this year supported mostly by strong global
More informationMCCI ECONOMIC OUTLOOK. Novembre 2017
MCCI ECONOMIC OUTLOOK 2018 Novembre 2017 I. THE INTERNATIONAL CONTEXT The global economy is strengthening According to the IMF, the cyclical turnaround in the global economy observed in 2017 is expected
More informationInternational Monetary and Financial Committee
International Monetary and Financial Committee Twenty-Eighth Meeting October 12, 2013 Statement by Olli Rehn, Vice-President, European Commission On behalf of the European Commission Statement by Vice-President
More informationAntonio Fazio: Overview of global economic and financial developments in first half 2004
Antonio Fazio: Overview of global economic and financial developments in first half 2004 Address by Mr Antonio Fazio, Governor of the Bank of Italy, to the ACRI (Association of Italian Savings Banks),
More informationDiscussion of Marcel Fratzscher s book Die Deutschland-Illusion
Discussion of Marcel Fratzscher s book Die Deutschland-Illusion Klaus Regling, ESM Managing Director Brussels, 30 September 2014 (Please check this statement against delivery) The euro area suffers from
More informationDBRS Confirms Republic of Portugal s Rating at BBB (low), Stable Trend
Date of Release: November 21, 2014 DBRS Confirms Republic of Portugal s at BBB (low), Stable Trend Industry: Public Finance--Sovereigns DBRS s Limited (DBRS) has confirmed the Republic of Portugal s long-term
More informationHow Europe is Overcoming the Euro Crisis?
How Europe is Overcoming the Euro Crisis? Klaus Regling, Managing Director, ESM University of Latvia, Riga 3 March 2014 Eight reasons for the sovereign debt crisis 1. Member States did not fully accept
More informationTHE GREEK ECONOMY: RECENT ECONOMIC DEVELOPMENTS
HELLENIC REPUBLIC MINISTRY OF FINANCE GENERAL SECRETARIAT OF ECONOMIC POLICY GENERAL DIRECTORATE FOR ECONOMIC POLICY Athens, August 2017 Briefing Note THE GREEK ECONOMY: RECENT ECONOMIC DEVELOPMENTS OVERVIEW
More informationEurozone fiscal highlights
Europe Insights Monthly update on European Markets May 18 Eurozone fiscal highlights Summary In the Spotlight. The eurozone's budget deficit shrank to -.9% of GDP in 17 (versus -1.5% in 16), its best result
More informationEurope Outlook. Third Quarter 2015
Europe Outlook Third Quarter 2015 Main messages 1 2 3 4 5 Moderation of global growth and slowdown in emerging economies, with downside risks The recovery continues in the eurozone, but still marked by
More informationA Fiscal Union in Europe: why is it possible/impossible?
Warsaw 18 th October 2013 A Fiscal Union in Europe: why is it possible/impossible? Daniele Franco Chiara Goretti Italian Ministry of the Economy and Finance This talk FROM non-controversial aspects General
More informationEFN REPORT. ECONOMIC OUTLOOK FOR THE EURO AREA IN 2017 and 2018
EFN REPORT ECONOMIC OUTLOOK FOR THE EURO AREA IN 2017 and 2018 Spring 2017 1 About the European ing Network The European ing Network (EFN) is a research group of European institutions, founded in 2001
More informationLeumi. Global Economics Monthly Review. Arie Tal, Research Economist. July 12, Capital Markets Division, Economics Department. leumiusa.
Global Economics Monthly Review July 12, 2018 Arie Tal, Research Economist Capital Markets Division, Economics Department Leumi leumiusa.com Please see important disclaimer on the last page of this report
More informationOVERVIEW. The EU recovery is firming. Table 1: Overview - the winter 2014 forecast Real GDP. Unemployment rate. Inflation. Winter 2014 Winter 2014
OVERVIEW The EU recovery is firming Europe's economic recovery, which began in the second quarter of 2013, is expected to continue spreading across countries and gaining strength while at the same time
More informationECONOMIC RECOVERY AT CRUISE SPEED
EBF Economic Outlook Nr 43 May 2018 2018 SPRING OUTLOOK ON THE EURO AREA ECONOMIES IN 2018-2019 ECONOMIC RECOVERY AT CRUISE SPEED EDITORIAL TEAM: Francisco Saravia (author), Helge Pedersen - Chair of the
More informationA measure of supercore inflation for the eurozone
Inflation A measure of supercore inflation for the eurozone Global Macroeconomic Scenarios Introduction Core inflation measures are developed to clean headline inflation from those price items that are
More informationTria: «Government commitment to the euro. And the debt will fall» Italian version
Pagina 1 di 6 Stampa Stampa senza immagine Chiudi INTERVIEW Tria: «Government commitment to the euro. And the debt will fall» Italian version The Minister of Economics: «The position of the executive branch
More informationMonetary Policy Council. Monetary Policy Guidelines for 2019
Monetary Policy Council Monetary Policy Guidelines for 2019 Monetary Policy Guidelines for 2019 Warsaw, 2018 r. In setting the Monetary Policy Guidelines for 2019, the Monetary Policy Council fulfils
More informationSpeaking Points for the Gaidar Forum Economic Perspective for Europe and Russia
Speaking Points for the Gaidar Forum Economic Perspective for Europe and Russia It is my pleasure and honor to take part in this panel to discuss the economic perspectives for Europe and Russia. Given
More informationFund Management Diary
Fund Management Diary Meeting held on 16 th October 2018 Euro-zone competitiveness imbalances In the run up to the global financial crisis differing competitiveness levels across the euro-zone contributed
More informationPrevisions Macroeconòmiques. Macroeconomic scenario for the Catalan economy 2017 and June 2017
PM Previsions Macroeconòmiques Macroeconomic scenario for the Catalan economy 2017 and 2018 June 2017 Previsions macroeconòmiques Macroeconomic scenario for the Catalan economy June 2017 ISSN: 2013-2182
More informationSlovenia. Eurozone rebalancing. EY Eurozone Forecast June Portugal Slovakia Slovenia Spain. Latvia Lithuania Luxembourg Malta Netherlands
EY Forecast June 215 rebalancing recovery Outlook for Activity to remain solid this year, after growing 2.4% in 214 Published in collaboration with Highlights n GDP grew by 2.4% in 214 and 3% in Q1 215,
More informationEurozone Economic Watch. July 2018
Eurozone Economic Watch July 2018 Eurozone: A shift to more moderate growth with increased downward risks BBVA Research - Eurozone Economic Watch July 2018 / 2 Hard data improved in May but failed to recover
More informationLetko, Brosseau & Associates Inc. Global Investment Management Since 1987
Letko, Brosseau & Associates Inc. Global Investment Management Since 1987 Economic and Capital Markets Outlook About us Letko, Brosseau & Associates Inc. is an independent, global investment management
More informationMinutes of the Monetary Policy Council decision-making meeting held on 2 September 2015
Minutes of the Monetary Policy Council decision-making meeting held on 2 September 2015 Members of the Monetary Policy Council discussed monetary policy against the background of the current and expected
More informationTHE SPANISH ECONOMY: FACTS THAT CANNOT BE OVERLOOKED
THE SPANISH ECONOMY: FACTS THAT CANNOT BE OVERLOOKED Luis de Guindos Minister of Economy and Competitiveness 6 September 2012 Accumulated Imbalances of the Spanish Economy 1. Private sector indebtedness
More informationInternational Monetary and Financial Committee
International Monetary and Financial Committee Twenty-Ninth Meeting April 12, 2014 Statement by Siim Kallas, Vice-President of the European Commission On behalf of the European Commission Statement of
More informationRecent Macroeconomic and Monetary Developments in the Czech Republic and Outlook
Recent Macroeconomic and Monetary Developments in the Czech Republic and Outlook Miroslav Singer Governor, Czech National Bank FORECASTING DINNER 212, Czech CFA Society Prague, 22 February 212 M. Recent
More informationInternational Monetary and Financial Committee
International Monetary and Financial Committee Thirty-Sixth Meeting October 14, 2017 IMFC Statement by Toomas Tõniste Chairman EU Council of Economic and Finance Ministers Statement by Minister of Finance,
More informationEurozone Ernst & Young Eurozone Forecast Spring edition March 2013
Eurozone Ernst & Young Eurozone Forecast Spring edition March 2013 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain
More informationSpanish position on strengthening the EMU
Spanish position on strengthening the EMU April 2018 Background The Euro-Summit on 15 December 2017 has created a renewed momentum for discussions on deepening the Economic and Monetary Union (EMU) during
More informationMarket volatility to continue
How much more? Renewed speculation that financial institutions may report increased US subprime-related losses has sent equity markets tumbling. How much more bad news can investors expect going forward?
More informationGlobal Debt and The New Neutral
Global Debt and The New Neutral May 1, 2018 by Nicola Mai of PIMCO Back in 2014, PIMCO developed the concept of The New Neutral as a secular framework for interest rates. After the financial crisis, the
More informationThe Economic Situation of the European Union and the Outlook for
The Economic Situation of the European Union and the Outlook for 2001-2002 A Report by the EUROFRAME group of Research Institutes for the European Parliament The Institutes involved are Wifo in Austria,
More informationA Selective Focus is Key to Navigating European Banking Sector Challenges
A Selective Focus is Key to Navigating European Banking Sector Challenges March 2016 PERSPECTIVES Key Insights Andrea Brasili Senior Economist Global Asset Allocation Research Diego Franzin Head of Equities
More informationRic Battellino: Recent financial developments
Ric Battellino: Recent financial developments Address by Mr Ric Battellino, Deputy Governor of the Reserve Bank of Australia, at the Annual Stockbrokers Conference, Sydney, 26 May 2011. * * * Introduction
More informationGovernor's Statement No. 12 October 13, Statement by the Hon. JENS WEIDMANN,
Governor's Statement No. 12 October 13, 2017 Statement by the Hon. JENS WEIDMANN, Governor of the Fund for GERMANY Statement by the Hon. Jens Weidmann, Governor of the Fund for Germany Mr. Chairman, Fellow
More informationThe euro area economy: an update Eurochallenge November 2013
The euro area economy: an update Eurochallenge November 2013 Delegation of the European Union to the United States www.euro-challenge.org What this presentation will cover Update on the economic situation
More informationItaly: Beyond the point of no return or surprisingly resilient? Public Finances and the Economic and Financial Document Rome, 11 March 2017
Lorenzo Codogno LC Macro Advisors Ltd Founder and Chief Economist +44 758 3564410 lorenzo.codogno@lc-ma.com Visiting Professor at London School of Economics L.Codogno@lse.ac.uk Italy: Beyond the point
More informationTranscript of interview with ESM Managing Director Klaus Regling. The interview was conducted by Tomoko Hatakeyama in Tokyo on 26 January 2016
Transcript of interview with ESM Managing Director Klaus Regling Published in Yomiuri Shimbun (Japan), 1 February 2016 The interview was conducted by Tomoko Hatakeyama in Tokyo on 26 January 2016 Yomiuri
More informationAtradius Country Report. Main Western European Markets - May 2018
Atradius Country Report Main Western European Markets - May 8 Contents Austria Belgium Denmark 7 France 9 Germany Ireland Italy The Netherlands 7 Spain 9 Sweden Switzerland United Kingdom Print all Austria
More informationEurozone Economic Watch. February 2018
Eurozone Economic Watch February 2018 Eurozone: Strong growth continues in 1Q18, but confidence seems to peak GDP growth moderated slightly in, but there was an upward revision to previous quarters. Available
More informationMacro Focus. From austerity to growth? 30 May Group Economics Macro Research
Macro Focus From austerity to growth? Group Economics Macro Research Nick Kounis Tel: +31 20 343 5616 Aline Schuiling Tel: +31 20 343 5606 30 May 2013 Europe has changed its approach. The European Commission
More informationIrish Economic Update AIB Treasury Economic Research Unit
Irish Economic Update AIB Treasury Economic Research Unit 10th October 2017 Budget 2018 Deficit Close To Being Eliminated The Irish economy has performed strongly in recent years, which has helped to boost
More informationEconomic Outlook No. 94
Economic Outlook No. 94 19 November 2013 11h00 (Paris time) Press Conference Angel Gurría Secretary-General & Pier Carlo Padoan Deputy Secretary-General and Chief Economist For a video link to the press
More informationSpanish economic outlook. June 2017
Spanish economic outlook June 2017 1 2 3 Spanish economy a pleasant surprise Growth drivers Forecasts once again bright One of the most dynamic economies in Europe Spain growing at a faster rate than EMU
More informationThe Outlook for European Economies
The Outlook for European Economies Domestic demand-led moderate economic growth forecast to continue REIKO SHINOHARA ECONOMIC RESEARCH OFFICE TOKYO SHIN TAKAYAMA ECONOMIC RESEARCH OFFICE LONDON MUFG Bank,
More informationPORTUGUESE BANKING SECTOR OVERVIEW
PORTUGUESE BANKING SECTOR OVERVIEW AGENDA I. Importance of the banking sector for the economy II. III. Credit activity Funding IV. Solvency V. State guarantee and recapitalisation schemes for credit institutions
More information