Why a battered Eurozone is still offering tempting opportunities January 13, 2015 Hedging currency exposure will be a saving grace. The Euro had a bumpy ride economically last year, and most don’t expect 2015 to bring much respite. Anaemic growth, credit contraction and a very real fear of a deflationary spiral (the inflation rate fell to -0.2 per cent in December) are fuelling mounting expectations of QE. [...]
Eurozone QE will be the most inefficient yet – CNBC Comment January 12, 2015 THE MARKET is expecting confirmation of a QE plan from European Central Bank (ECB) president Mario Draghi very soon. Indeed, CNBC learned yesterday that the ECB will more than likely base its highly-anticipated sovereign bond buying on the size of contributions made by national central banks. But whatever form it takes, it will almost certainly [...]
Eurozone bond purchases could still disappoint January 11, 2015 ECONOMISTS warn there is still room for disappointment regarding a new European government bond purchases – or quantitative easing (QE) – despite expectations that one is guaranteed in the near future. A ruling on a 2012 emergency government bond buying programme by the European Court of Justice – due on Wednesday – could lead to [...]
Angela Merkel and Syriza are about to open Pandora’s box: Watch out, Eurozone January 11, 2015 It is not often that I feel sorry for German Chancellor Angela Merkel. Having lived in her country since 2006, for me she is the most overrated of modern politicians, having accomplished almost nothing in terms of substantive policy achievements, while somehow being lionised for her lack of ambition. She is the archetype of this [...]
Eurozone: ECB said to have discussed €500bn quantitative easing programme January 9, 2015 European Central Bank (ECB) officials are said to have discussed a €500bn quantitative easing programme, which many hope will rescue the embattled Eurozone from its economic quagmire. If the programme is launched, it will involve the central bank buying up government debt rated BBB- or higher. Purchasing only investment-grade debt minimises the bank's exposure to [...]
Eurozone confidence remains weak January 8, 2015 THE EUROZONE’s economic sentiment indicator remained unchanged at 100.7 for the third consecutive month, according to figures released yesterday by the European Commission (EC). “December’s EC business and consumer survey did little to alter the picture of weak Eurozone GDP growth at the end of 2014,” said Jessica Hinds of Capital Economics.
Eurozone enters deflation giving Draghi upper hand January 7, 2015 THE EUROZONE has slipped into deflation as prices fell by 0.2 per cent year-on-year in December. It marks a significant fall from November when prices rose by 0.3 per cent, according to Europe’s official statistical office Eurostat. Economists have raised their expectations that the European Central Bank (ECB) will begin a large programme of asset [...]
Why QE alone won’t stop the Eurozone’s descent into the deflation trap January 7, 2015 We’re caught in a trap” is the opening line of Suspicious Minds, a song most memorably sung by Elvis Presley, born 80 years ago today. However, it could well be the latest conversational ice-breaker for Mario Draghi, president of the European Central Bank (ECB), with colleagues or other policymakers across the continent. Europe risks entering [...]
Eurozone deflation: Euro area posts negative rate for the first time since 2009 January 7, 2015 There was yet more misery for the Eurozone this morning as it entered deflation for the first time since 2009. Eurozone inflation dropped to -0.2 per cent compared with a year earlier, according to official data released by Eurostat. This was more than the -0.1 per cent economists had forecast for December. It's largely due [...]
Eurozone services PMI disappoints in December January 6, 2015 It's yet more bad news for the eurozone economy after miserable growth in its three largest economies ensured the single currency bloc disappointed again in December. The eurozone's three biggest economies – France, Italy and Germany – had disappointing performances according to Markit's final December Composite Purchasing Managers' Index (PMI). The index, where any reading [...]