tag:blogger.com,1999:blog-17300788905680285892024-03-05T22:43:51.904+01:00Top down outlookGlobal economies and financial markets seen from a European perspectiveMatteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.comBlogger139125tag:blogger.com,1999:blog-1730078890568028589.post-6842920068223612012013-10-15T11:17:00.001+02:002016-07-26T16:24:54.302+02:00German investors confidence at the highest in 42 months<div dir="ltr" style="text-align: left;" trbidi="on">
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<span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Despite uncertainties
related to the US government shutdown and the discussions in Congress to rise
the debt ceiling, German investors confidence rose to the highest since April ’10
in October. Zew economic sentiment index rose in October from 49.6 to 52.8, better
than market expectations (51.0). </span></span></div>
<div style="text-align: justify;">
<span lang="EN-US" style="mso-ansi-language: EN-US;"></span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: "calibri";"><span style="font-family: "arial" , "helvetica" , sans-serif;">The figure
is a positive sign for the IFO business confidence index due on Friday October
25th and it is in line with a 1.5%/2% annualized growth of GDP in Q4. The only
negative pieces of news came from the current conditions index, declined from
30.6 to 29.7.</span> </span></span></div>
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<span lang="EN-US" style="mso-ansi-language: EN-US;"></span> </div>
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Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-26225949221736170862013-09-04T11:54:00.000+02:002013-09-04T11:54:23.596+02:00Further signs of a weak recovery in the Euro zone<div dir="ltr" style="text-align: left;" trbidi="on">
<span lang="EN-US" style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><div style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">Final PMI services indices released today in the Euro zone
confirmed that economic activity could pick up in H2 ’13, even if at moderate
pace. </span></span></div>
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<span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US;"></span> </div>
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<span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">Euro zone PMI services index rose from 49.8 in July to 50.7 in August,
lower than flash estimate at 51.0. Composite index rose from 50.5 to 51.5,
lower than flash estimate at 51.7. </span></span></div>
<div style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US;"></span> </div>
<div style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">According to our calculations, the past
relationship between the PMI composite and the overall economy indicates, the
August PMI corresponds to a 0.5% y/y GDP growth in Q4 ’13. </span></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDhy32gK7iQgvs2bwE3f7OTppJ5rR5gW1cY2v3j9PRed_HWFI8_2vFFm1y-m0YcsK0t1s0UGcApLG6CYlp8dFHlt9Qw-11t0DEsaRr-tSNeLXNDDMBHr3WA7xKzZV4RZyGRBK1BFvVi9cr/s1600/pmi+composite.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDhy32gK7iQgvs2bwE3f7OTppJ5rR5gW1cY2v3j9PRed_HWFI8_2vFFm1y-m0YcsK0t1s0UGcApLG6CYlp8dFHlt9Qw-11t0DEsaRr-tSNeLXNDDMBHr3WA7xKzZV4RZyGRBK1BFvVi9cr/s320/pmi+composite.jpg" width="290" /></a></div>
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<span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;"></span></span> </div>
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<span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">National services
indices signaled that services index expanded in Germany (at 52.8 in August)
but continued to contract in France (48.9 in August – 12 month high) and Italy
(48.8). </span></span></div>
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<span lang="EN-US" style="font-family: "Arial","sans-serif"; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;"><o:p></o:p></span></span> </div>
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<o:p></o:p></span></span></div>
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Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-61144349317860199632013-09-02T11:31:00.000+02:002013-09-02T11:31:27.476+02:00August PMI manufacturing indices: recovery in the Euro zone and in China. Emerging Asia ex-China slowing down<div dir="ltr" style="text-align: left;" trbidi="on">
<span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Calibri;">PMI manufacturing
indices for August released today strengthened the view that Euro zone economy
could extend the rebound started in Q2 – when GDP rose by 0.3% q/q – in H2 ’13.
Euro zone PMI manufacturing index rose from 50.3 to 51.4, above an </span><a density="full" href="http://www.markiteconomics.com/Survey/PressRelease.mvc/fd58998f084a468c8df4ba5b07d4754b" title="Open Web Site"><span style="color: windowtext; text-decoration: none; text-underline: none;"><span style="font-family: Calibri;">estimate</span></span></a><span style="font-family: Calibri;"> of 51.3 published on Aug. 22. A
reading above 50 indicates growth.</span></span><br />
<span lang="EN-US" style="mso-ansi-language: EN-US;"></span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Calibri;">Euro zone
figure is in line with a slight recovery in Q3 and Q4. Economic activity could
improve in the quarters ahead but the risk of a return to recession in case of
negative shocks are still very high, in our view. </span></span><br />
<span lang="EN-US" style="mso-ansi-language: EN-US;"></span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Calibri;">Indices
were above 50 in all major Euro zone countries, with the exception of France:<o:p></o:p></span></span><br />
<br />
<div class="MsoListParagraphCxSpFirst" style="margin: 0cm 0cm 0pt 36pt; mso-list: l0 level1 lfo1; text-indent: -18pt;">
<!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">1)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Calibri;">German PMI rose from 50.7 to 51.8
(flash estimate 52.0). The revision in Germany does not seem meaningful. The
trend remains positive<span style="mso-spacerun: yes;"> </span>and industrial
production is expected to continue growing in the months ahead despite market
expectations for a correction of orders and output in July (data are due during
the week);<o:p></o:p></span></span></div>
<br />
<div class="MsoListParagraphCxSpMiddle" style="margin: 0cm 0cm 0pt 36pt; mso-list: l0 level1 lfo1; text-indent: -18pt;">
<!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">2)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Calibri;">French PMI remained unchanged at 49.7.
French data could increase concern on the recovery there. However, INSEE index
for August rose more than expected, giving an opposite message compared to the
PMI index. French outlook is still worrisome as competiveness is low and public
finance continue to deteriorate;<o:p></o:p></span></span></div>
<br />
<div class="MsoListParagraphCxSpLast" style="margin: 0cm 0cm 10pt 36pt; mso-list: l0 level1 lfo1; text-indent: -18pt;">
<!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">3)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Calibri;">Italian PMI rose from 50.4 to 51.3 –
the 27 month high of the index;</span></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYsrzG4rKKHJbK-w_WZVknVwYv6GwKmAVqyOOmVSSM4YlJ70563nxTUPRMTR_mF6UB1jir45O4kojxAwy8hUOhxme7e15QjSkdSc_j77GV70ivd0bYpLu205Dg3brdS5q-N2A9go4XQ2Qb/s1600/PMI+and+italian+ip.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="196" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYsrzG4rKKHJbK-w_WZVknVwYv6GwKmAVqyOOmVSSM4YlJ70563nxTUPRMTR_mF6UB1jir45O4kojxAwy8hUOhxme7e15QjSkdSc_j77GV70ivd0bYpLu205Dg3brdS5q-N2A9go4XQ2Qb/s320/PMI+and+italian+ip.jpg" width="320" /></a></div>
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<span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Calibri;"><o:p></o:p></span></span> </div>
<span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Calibri;">PMI indices
also rose in Netherlands - from 50.8 to 53.5 – and in Spain – from 49.8 to
51.1. In Europe, UK PMI manufacturing index climbed from 54.8 to 57.2. </span></span><br />
<span lang="EN-US" style="mso-ansi-language: EN-US;"></span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Calibri;">Positive news
also came from China, where PMI manufacturing index was at 51.0 against market
expectations at 50.6. </span></span><br />
<span lang="EN-US" style="mso-ansi-language: EN-US;"></span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Calibri;">However,
the picture in the emerging Asia ex-China was less positive, with indices below
50 - signalling contraction for the sector - in South Korea, India, and
Indonesia. <o:p></o:p></span></span><br />
</div>
Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com2tag:blogger.com,1999:blog-1730078890568028589.post-90243330489263062822013-08-30T16:39:00.000+02:002013-08-30T16:39:12.310+02:00Euro zone CPI calls for an ECB rate cut<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 9.5pt; line-height: 115%; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">Flash August Euro CPI
decelerated from 1.6% y/y to 1.3% y/y, lower than market expectations at 1.4%
y/y. Looking at the details of the release, most of the fall can be attributed
to the energy component which decelerated from 1.6% y/y to -0.4% y/y while the remaining
components remained broadly stable. Core CPI remained unchanged at 1.1% y/y. </span></span></div>
<div style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 9.5pt; line-height: 115%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 9.5pt; line-height: 115%; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">With energy slowdown
likely to be temporary, CPI could rebound to 1.5% y/y by year-end.</span></span></div>
<div style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 9.5pt; line-height: 115%; mso-ansi-language: EN-US;"></span><span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 9.5pt; line-height: 115%; mso-ansi-language: EN-US;">However, inflationary
pressures are likely to remain subdued in the months ahead as indicated by
latest ECB monetary aggregates figures. </span><span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-GB;">Money supply M1 growth rate fell from 7.5% to 7.1% and
M3 2.4% to 2.2% y/y. The following data suggest that CPI should remain weak in the
next few months.</span></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-GB;"></span></span> </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjaVggjRtVjKdiIgk04EZDpm-riFyOmXOTokHTJ51jh0yN7MzNYUudOvi6xsM8_c65I7s0bv1zzkPK-NUn4qYysKSBRRH3gFF-_-6s7hsl0NjAEPc9JfwF8B14T5xkbcUy5jRYzVlsIYHL3/s1600/cpi+and+monetary+aggregates.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjaVggjRtVjKdiIgk04EZDpm-riFyOmXOTokHTJ51jh0yN7MzNYUudOvi6xsM8_c65I7s0bv1zzkPK-NUn4qYysKSBRRH3gFF-_-6s7hsl0NjAEPc9JfwF8B14T5xkbcUy5jRYzVlsIYHL3/s320/cpi+and+monetary+aggregates.jpg" width="320" /></a></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-GB;"></span></span> </div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-GB;"></span></span><span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-GB;"><span style="font-family: Arial, Helvetica, sans-serif;">Low inflationary
pressures should push the ECB to further ease monetary policy as soon as next
week. Indeed ECB is missing both the target of CPI below but close to 2% and on
M3 growth rate of 4.5%. </span></span></div>
<div style="text-align: justify;">
<span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-GB;"></span><span lang="EN-GB" style="font-family: "Tahoma","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-GB;"><span style="font-family: Arial, Helvetica, sans-serif;">However we do not
expect the ECB to ease monetary policy unless Euro zone economy falls back in
recession.</span> </span><span lang="EN-US" style="mso-ansi-language: EN-US;"><o:p></o:p></span></div>
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Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-61765552172188436332013-08-29T16:39:00.000+02:002013-08-29T16:39:10.242+02:00Italian confidence indices improve in August. Will the positive trend continue?<div dir="ltr" style="text-align: left;" trbidi="on">
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<span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">Both
business and consumer confidence indices improved in August, suggesting that
economic outlook is slightly improving also in Italy.</span></span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 10pt; text-align: justify;">
<span lang="EN-US" style="mso-ansi-language: EN-US;"></span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">1)
manufacturing confidence index rose from 91.8 to 92.9 - the highest since
November '11. Despite remaing at value in line with a contraction of industrial
output in the next 2/3 months, it signalled that industrial sector could find a
bottom soon;</span></span></div>
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<span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;"><o:p></o:p></span></span> </div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">2) Consumer
confidence index rose from 97.4 to 98.9. It is a sign that consumer spending
could improve in H2 '13 even if at modest pace due to high unemployment rate.<o:p></o:p></span></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div style="text-align: justify;">
<span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">The two
data strengthened the view that - absent other negative shocks - Italian
economy could stabilize in Q3 and return to growth in Q4<o:p></o:p></span></span></div>
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Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com1tag:blogger.com,1999:blog-1730078890568028589.post-22753856876435394972013-06-27T17:32:00.001+02:002013-06-27T17:32:45.596+02:00How close is the end of US Government bond yields rally?<div dir="ltr" style="text-align: left;" trbidi="on">
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<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: black;"><strong>The trend of the
last weeks</strong> </span></span></span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"></span><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: black;"><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;">US 10 year
Government bond yields jumped from 2% on May 22<span style="font-size: small;"><sup>nd</sup> – when Fed
President </span></span><span lang="EN" style="color: black; font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN;">Mr. Bernanke
suggested that the Fed might cut back on bond purchases some time in “the next
few meetings” and </span><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;">the minutes of
April 30<span style="font-size: small;"><sup>th</sup>/May 1<sup>st</sup> monetary policy meeting indicated that
</span></span><span lang="EN" style="color: black; font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN;">“a number of participants expressed
willingness to adjust the flow of purchases downward as early as the June
meeting </span><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;">– to 2.61% on Monday
24<span style="font-size: small;"><sup>th</sup>. From the lowest level touched on May 2<sup>nd</sup> at 1.63%
yields increased by 98bp.</span></span></span></span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"><span style="color: black; font-family: Arial, Helvetica, sans-serif;">The upward trend
of 10 year yields further strengthened following the Bernanke’s press
conference on June 19th, when he confirmed that that the central bank could
reduce its purchases this year and halt them around mid-2014. The acceleration
of the yields increase fuelled concerns that rising government bond yields
could have a negative impact on equity markets. However, S&P500 was so far
resilient, falling by a mere 3.4% from the historical high at 1655 set on May
22. On Wednesday 26th 10 year yields corrected to 2.52% as final Q1 GDP data
disappointed investors: indeed it was revised down from 2.4% to 1.8% annualized,
mainly due to weaker consumer spending growth. </span></span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"><strong><span style="color: black; font-family: Arial, Helvetica, sans-serif;">Fed’s reaction</span></strong></span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"><span style="color: black; font-family: Arial, Helvetica, sans-serif;">The strong
increase of Government bond yields alarmed Fed’s members. For example, Minneapolis
Fed President Narayana Kocherlakota said in an interview with CNBC on Wednesday
26th that the bond-market reaction to last week's Federal Reserve decision was
"outsized". He also highlighted that the Fed needs to defend its 2%
inflation target both from above and below.</span></span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: black;"><strong>Limited upside
potential</strong> </span></span></span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"><span style="color: black; font-family: Arial, Helvetica, sans-serif;">Our base
scenario is that from current level government bond yields have limited upside
potential. In our view, 10 year government yields will hardly exceed the 2.75%
target for year-end set by Deutsche Bank chief economist Joseph LaVorgna in a
recent note. Indeed we believe that the economic outlook does not support a
further increase of government yields. </span></span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: black;">First, because
US economy lacks a strong engine of growth in the next few quarters:<o:p></o:p></span></span></span></div>
<div style="text-align: justify;">
<span style="color: black; font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt 36pt; mso-layout-grid-align: none; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18pt;">
<!--[if !supportLists]--><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: black;"><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">1)<span style="font-family: "Times New Roman"; font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span></span><!--[endif]--><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;">Consumer spending is likely to continue expanding at
moderate pace (1.5/2.0% annualized) as jobs creation remain weak;<o:p></o:p></span></span></span></div>
<div style="text-align: justify;">
<span style="color: black; font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt 36pt; mso-layout-grid-align: none; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18pt;">
<!--[if !supportLists]--><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: black;"><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">2)<span style="font-family: "Times New Roman"; font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span></span><!--[endif]--><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;">Government spending contribute to economic growth will
soften for the spending cut become effective since March 1<span style="font-size: small;"><sup>st</sup>;<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></span></span></div>
<div style="text-align: justify;">
<span style="color: black; font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt 36pt; mso-layout-grid-align: none; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18pt;">
<!--[if !supportLists]--><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: black;"><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">3)<span style="font-family: "Times New Roman"; font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span></span><!--[endif]--><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;">Investments are likely to be negatively impacted by
the tightening of fiscal policy;<o:p></o:p></span></span></span></div>
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<span style="color: black; font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt 36pt; mso-layout-grid-align: none; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18pt;">
<!--[if !supportLists]--><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: black;"><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">4)<span style="font-family: "Times New Roman"; font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span></span></span><!--[endif]--><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;">Exports will suffer due to weakening of economic
activity in emerging market and recession in the Euro zone.</span></span></span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt 36pt; mso-layout-grid-align: none; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18pt;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"><span style="color: black; font-family: Arial, Helvetica, sans-serif;">Second, because
inflationary pressures are well contained and are not expected to pick up in
the foreseeable future. </span></span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"><strong><span style="color: black; font-family: Arial, Helvetica, sans-serif;">The case for
being bullish</span></strong></span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"><span style="color: black; font-family: Arial, Helvetica, sans-serif;">In our view, the
potential for a decline of Government bond yields in the months ahead is higher
than the potential for a further increase. In particular should economic
activity being weaker than Fed projections for a 2.4/2.5% GDP growth in 2013
and 3.2/3.3% in 2014. </span></span></div>
<div class="MsoNormal" style="line-height: 120%; margin: 0cm 0cm 10pt; mso-layout-grid-align: none; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; line-height: 120%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 10pt; line-height: 120%; mso-ansi-language: EN-US;"><span style="color: black;"><span style="font-family: Arial, Helvetica, sans-serif; font-size: small;">A similar view
is shared by Jeffrey Gundlach, head of DoubleLine Capital LP. He said on
Tuesday 25<sup>th</sup> that “the selloff in the bond market is likely to end
in the next few weeks and that now is the time to consider buying riskier debt”.
Gundlach characterized the selloff in the bond market as a "liquidation
cycle" that will end within weeks, once the benchmark 10-year Treasury hits
a high of 2.75%.</span> <o:p></o:p></span></span></div>
</div>
Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-16480705551656891552013-06-18T15:37:00.002+02:002013-06-18T15:37:44.728+02:00USA: CPI and housing market sligthly weaker than expected<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">May headline consumer price inflation rose by 0.1%, below expectations of a 0.2% increase, and up 1.4% from the prior year. Core CPI, excluding food and energy, rose by 0.2% in line with expectations, and up 1.7% from past year.<br />These numbers confirmed that inflationary pressures are non-existent now, strenghtening the view that the Fed could continue in its asset purchase programme at current pace.</span></div>
<div style="text-align: justify;">
<span style="font-family: Arial;"></span> </div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">Housing market data came out slightly worse than market expectations. Housing starts set at 914K, below expectations of 950K, and permits at 974K (exp. 975K). </span></div>
</div>
Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-80706645851365854662013-06-18T12:50:00.002+02:002013-06-18T12:50:13.121+02:00Germany: Zew index better than expected in June<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">June Zew economic sentiment index rose from 36.4 to 38.5 beating market consensus at 38.2. It is a sign that German economy could improve at year-end. <br />With regards to the perspectives of German economy, the focus is now on business confidence indices: PMI manufacturing index due on Thurday 20th and IFO business confidence index due on Monday 24th. The indices should remain almost unchanged compared to the previous month (at 49.9 and 105.7 respectively), in line with a moderate growth rate for the industrial sector in Q3.</span></div>
</div>
Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-2538330211877889082013-05-24T14:53:00.003+02:002013-05-24T14:53:34.901+02:00Business confidence improves in Germany and France. Consumer confidence down in Italy<div dir="ltr" style="text-align: left;" trbidi="on">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-US;">May business confidence indices released today in
Germany and France came out better than expected, signaling that the two major
Euro zone economies could improve in the next 2/3 months. </span><br />
<div class="MsoNormal" style="margin: 0cm 0cm 10pt; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-US;">In Germany, <strong>IFO business confidence</strong> index jumped from 104.4 to
105.7 against economists’ expectations for a data almost unchanged at 104.5. </span><span lang="EN" style="font-family: "Arial","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN;">The sub-index measuring current business jumped to 110.0
points in May from 107.2 points in April. And the outlook sub-index was
unchanged at 101.6 points. The data is in line with an acceleration of industrial
production in the next 2/3 months. </span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjl7x3hyogMNgyRMLcLO8B4FToV0VffUxDZEbPu4rZE7cXfuIa_vUhktuRT5760JweuXK85IV_jQ35sltstzir7tF4jQojsHjLqcQfnw3P6cAPUayGZqqTZo4V96x9Vh0GrrBPYIgFVFqOT/s1600/German+industrial+production+and+IFO.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjl7x3hyogMNgyRMLcLO8B4FToV0VffUxDZEbPu4rZE7cXfuIa_vUhktuRT5760JweuXK85IV_jQ35sltstzir7tF4jQojsHjLqcQfnw3P6cAPUayGZqqTZo4V96x9Vh0GrrBPYIgFVFqOT/s320/German+industrial+production+and+IFO.png" width="320" /></a></div>
<div class="MsoNormal" style="margin: 0cm 0cm 10pt; text-align: justify;">
<span lang="EN" style="font-family: "Arial","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN;"></span> </div>
<div class="MsoNormal" style="margin: 0cm 0cm 10pt; text-align: justify;">
<span lang="EN" style="font-family: "Arial","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-US;">In France, <strong>INSEE business confidence index</strong> jumped from 88 to 92,
better than market expectations at 90. The figure is in line with an
improvement of industrial sector outlook despite remaining below long term
average and at a value in line with 0.6% y/y contraction of French industrial
production in the next 2/3 months.</span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 10pt; text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-US;"></span><span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-US;"><strong>Italian consumer confidence index</strong> fell from 86.3 to
85.9. The index is now close to the historical low at 84.7 recorded in January
due to high unemployment rate. In this scenario, consumer spending could
continue contracting in the months ahead.<o:p></o:p></span></div>
</div>
Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-11416489980077568182012-08-08T23:16:00.002+02:002012-08-08T23:16:40.766+02:00Is it time to invest in the Italian equity market?<div dir="ltr" style="text-align: left;" trbidi="on">
<span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">The
economic data released over the last week confirmed that the Italian economy is
in a dire recession:<o:p></o:p></span></span><br />
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoListParagraphCxSpFirst" style="margin: 0cm 0cm 0pt 36pt; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18pt;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">The <a href="http://www.istat.it/en/archive/68724" target="_blank">Q2’s GDP</a> </span></span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">contracted by 0.7% q/q – slightly better than
market expectations at -0.8% q/q. It was the fourth consecutive quarterly
decline: -0.8% q/q in Q1 ’12, -0.7% q/q in Q4 ’11 and -0.2% q/q in Q3 ’11. The
year over year change fell from -1.4% in Q1 ’12 to -2.5% in Q2 ’12.<o:p></o:p></span></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoListParagraphCxSpLast" style="margin: 0cm 0cm 10pt 36pt; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18pt;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">In June, the <a href="http://www.istat.it/en/archive/68699" target="_blank">Italian industrialproduction</a></span></span> <a href="http://fell/"><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">fell</span></span></a><span style="font-family: Arial, Helvetica, sans-serif;"> by 1.4% m/m, 1.7% q/q and
8.2% y/y.<o:p></o:p></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">The leading
indicators released over the last few weeks signaled that a recovery of the
Italian economy is not imminent:<o:p></o:p></span></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoListParagraphCxSpFirst" style="margin: 0cm 0cm 0pt 36pt; mso-list: l2 level1 lfo2; text-align: justify; text-indent: -18pt;">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJFZ83om-cH6_xdrebvBV49EqxPO_6ADb0Mhs_EOkuaTxsvviud_4J3IYHV21wMyfjuvxkn5mZOzGzZ8z8EHPMZyxzMFrb6fKAdv8RA43wO_opdnGrV_vVsdGW0ZGsqp1roUrMVJL5jpmJ/s1600/1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJFZ83om-cH6_xdrebvBV49EqxPO_6ADb0Mhs_EOkuaTxsvviud_4J3IYHV21wMyfjuvxkn5mZOzGzZ8z8EHPMZyxzMFrb6fKAdv8RA43wO_opdnGrV_vVsdGW0ZGsqp1roUrMVJL5jpmJ/s320/1.jpg" width="320" /></a></div>
<span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">The Istat business confidence index
was at 87.1 in July – only slightly above the 3 year low at 86.5 posted in May.
The index signaled that the industrial production may contract by 10% y/y in
Q3;<o:p></o:p></span></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoListParagraphCxSpLast" style="margin: 0cm 0cm 10pt 36pt; mso-list: l2 level1 lfo2; text-align: justify; text-indent: -18pt;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">The Istat consumer confidence index
signaled that the consumer spending will continue to remain weak in H2 ’12 for
the negative outlook of the labor market. According to the latest Eurostat’s data,
the <a href="http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-31072012-BP/EN/3-31072012-BP-EN.PDF" target="_blank">Italian unemployment rate rose to a multiyear high of 10.8% in June</a>. </span></span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 10pt; text-align: justify;">
<span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">However,
despite the negative economic scenario, the Italian equity market strongly
rebounded over the last few weeks: from the year-low at 12295 posted on July 25<sup><span style="font-size: x-small;">th</span></sup>,
the FTSEMIB jumped by almost 20%. <o:p></o:p></span></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 10pt; text-align: justify;">
<span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">The main
reason behind the rebound of the equity markets were the expectations that the
ECB may intervene in the secondary market to lower the government bond yields
in Spain and Italy. Indeed, the equity market rally started after the <a href="http://www.ecb.int/press/key/date/2012/html/sp120726.en.html" target="_blank">ECBpresident Mario Draghi said on July 26th at the Global Investment Conference in London</a> </span></span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;"> that the ECB “will do whatever it
takes to preserve the euro” and continued after the ECB announced at the end of
the last <a href="http://www.ecb.int/press/pressconf/2012/html/is120802.en.html" target="_blank">week monetary policy meeting</a></span></span><span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-US" style="mso-ansi-language: EN-US;"> that it will start buying the
Spanish and Italian government</span><span lang="EN-GB" style="mso-ansi-language: EN-GB;"> bonds on the secondary markets if the two countries will ask for the
intervention of the EFSF/ESM.<o:p></o:p></span></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span lang="EN-GB" style="mso-ansi-language: EN-GB;"><span style="font-family: Arial, Helvetica, sans-serif;">Following
the ECB announcement, the Italian government bond yields declined: the 2 year
yield fell from 5% to 3.08% and the 10 year yields fell from 6.6% to 5.9%. </span></span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiD5gyvEy5Xk9bEsnC6wHcwW_b3ko5IbWzl2Xk9bsImtN3kW7qMZc-XKM6U3jLskJBCZR5x5nF1rePlFSeRSOADTxM-i2o8MrBIpcDJ7esBH52DxjLCiElyAj6XlDczivOP9VFPjtsxKtXT/s1600/2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiD5gyvEy5Xk9bEsnC6wHcwW_b3ko5IbWzl2Xk9bsImtN3kW7qMZc-XKM6U3jLskJBCZR5x5nF1rePlFSeRSOADTxM-i2o8MrBIpcDJ7esBH52DxjLCiElyAj6XlDczivOP9VFPjtsxKtXT/s320/2.jpg" width="320" /></a></div>
</div>
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<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span lang="EN-GB" style="mso-ansi-language: EN-GB;"><span style="font-family: Arial, Helvetica, sans-serif;">A steep
decline of the government bond yields in Italy will have a strong impact on the
Italian economy as:<o:p></o:p></span></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoListParagraphCxSpFirst" style="margin: 0cm 0cm 0pt 36pt; mso-list: l1 level1 lfo3; text-align: justify; text-indent: -18pt;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">It will lower the interest expenses
on the huge public debt (close to 120% of GDP);<o:p></o:p></span></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoListParagraphCxSpMiddle" style="margin: 0cm 0cm 0pt 36pt; mso-list: l1 level1 lfo3; text-align: justify; text-indent: -18pt;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">It will improve the outlook for the
banking sector, which is highly exposed on the Government bonds;<o:p></o:p></span></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div class="MsoListParagraphCxSpLast" style="margin: 0cm 0cm 10pt 36pt; mso-list: l1 level1 lfo3; text-align: justify; text-indent: -18pt;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">3)<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">It will lower the cost of financing
for the non-financial corporations.</span></span></div>
<div class="MsoListParagraphCxSpLast" style="margin: 0cm 0cm 10pt 36pt; mso-list: l1 level1 lfo3; text-align: justify; text-indent: -18pt;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span lang="EN-US" style="mso-ansi-language: EN-US;"></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">For this
reason, a further decline of the long-term Government Bond yield – i.e. a
decline of 10 year BTP yield below 5.5% - is crucial for buying the Italian
equity market in a medium term perspective. Since 1994 a simple trading
strategy of buying the Italian equity markets (we used the Comit index as a
benchmark) at the end of the month when the 10 year BTP yield was below the
previous year yield and exiting from the market in the opposite case gained a
121% performance versus the -5% of a buy and hold strategy.</span></span></div>
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<span lang="EN-US" style="mso-ansi-language: EN-US;"></span><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">Another
positive sign should be a rebounded of the business confidence index. In the
past, a bottom of the business confidence index anticipated not only an
improvement of the economic activity but also the start of an upward trend of
the equity market. The next Istat business confidence index will be released on
August 30<sup><span style="font-size: x-small;">th</span></sup>. </span></span><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOmQSbFHpkmyhDnHf9TiaGwd5bYVoW2nD6fIWLo5WYVe_6UjqiOcEzN8Tkc6ScOEqLSonHr_PisBqGJkrFA4kN948a7UZueUjOY8kPzYiNR34X80O7WcZ5gnoSuOj5RkzRop5-oAt_YOBc/s1600/3.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOmQSbFHpkmyhDnHf9TiaGwd5bYVoW2nD6fIWLo5WYVe_6UjqiOcEzN8Tkc6ScOEqLSonHr_PisBqGJkrFA4kN948a7UZueUjOY8kPzYiNR34X80O7WcZ5gnoSuOj5RkzRop5-oAt_YOBc/s320/3.jpg" width="320" /></a></div>
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</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-67876575188525867282012-07-30T14:11:00.004+02:002012-07-30T14:11:25.892+02:00U.K. Q2 GDP: The Sterling Is Not A Safe Haven<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">In the UK, </span><a href="http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q2-2012/index.html" rel="nofollow"><span style="font-family: Arial, Helvetica, sans-serif;">Q2 GDP data</span></a><span style="font-family: Arial, Helvetica, sans-serif;"> came out worse than expected, with a 0.7% q/q
contraction. The consensus expectations were for a 0.2% q/q decline. Compared to
the same period 1 year ago, the GDP contracted by 0.8%. The ONS indicated that (</span><a href="http://seekingalpha.com/article/760331-u-k-q2-gdp-the-sterling-is-not-a-safe-haven" target="_blank"><span style="font-family: Arial, Helvetica, sans-serif;">continue on seekingalpha</span></a><span style="font-family: Arial, Helvetica, sans-serif;">)...</span></div>
</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-25231383571712016392012-07-26T15:17:00.001+02:002012-07-26T15:17:21.445+02:00Very volatile data today in the USA<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">Economic data released today were very volatile: 1) Initial jobless claims fell from 388k to 353k vs market consensus. The data was very volatile in the last weeks due to plant shutdown and difficulties in seasonal adusting the data. However, the data is a positive indication for the labour market in July. Jobs creation in July may slightly below 100k. 2) durable goods orders rose by 1.6% m/m vs expectations at 0.3% m/m. The ex-transportation data fell by 1% m/m. The data is in line with the contination of a moderate of growth for the manufacturing sector in Q3.</span></div>
</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-16998128184121845672012-07-26T15:16:00.001+02:002012-07-26T15:16:10.942+02:00Euro zone: M3 data rose but loans declined<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">The data for June released today by the ECB signalled that the Money supply growth accelerated slightly but loans to the private sector decreased. the M3 rate of growth rose from 3.1% y/y (revised from 2.9% y/y) to 3.2% y/y. The annual total credit growth to the private sector fell from -0.2% to -0.4%. Loans to household remained unchanged at +0.3% (for home purchases +0.8%, consumer credit -1.9%). Loans to financial corporations fell from 0.0% to -0.6% y/y. The latest data signals that the situation of the credit market is still dire and increases the possibilities that the ECB may further ease monetary policy over the next week. </span></div>
</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-34905079209459098412012-07-25T11:20:00.003+02:002012-07-25T11:20:53.268+02:00Italian consumer confidence rebounded in July<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Arial, Helvetica, sans-serif;">The Italian consumer confidence index unexpectedly rebounded from 85.4 in June - the historical low of the index - to 86.5 in July. The improvement was led by the view on the Italian economic outlook and a better view on the labour market. Despite the rebound in July the index remains on historically low level, signalling that consumer spending may continue contracting in Q3.</span><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFr8IxvZKA4gsz5KrNsE80rhKJ7ty5ue2NdaSdkAP5koqpWdUWtdVnT91T6CdmlD36BVwbJa9hzDKDvY7MtpkyXgfeS_lrF7Y0gQvi7-4a-FKFA8freD44JfpwgNPK_shhSjB4Eu_iy0na/s1600/12.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFr8IxvZKA4gsz5KrNsE80rhKJ7ty5ue2NdaSdkAP5koqpWdUWtdVnT91T6CdmlD36BVwbJa9hzDKDvY7MtpkyXgfeS_lrF7Y0gQvi7-4a-FKFA8freD44JfpwgNPK_shhSjB4Eu_iy0na/s320/12.jpg" width="320" /></a></div>
<br />
</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-65989625664504825412012-07-24T23:17:00.004+02:002012-07-24T23:17:17.777+02:00S&P 500: Is It Too Risky Investing Now?<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">Despite the debt crisis in the eurozone, the signs of weakening of the economic
growth in the USA and in China, the S&P 500 remains only 4% below the
highest close since '08 posted on April 2nd at 1419. Over the last week, the
index managed to gain 0.4%, with the decline on Friday (-1%) only limiting the
performance. </span><a href="http://seekingalpha.com/article/744891-s-p-500-is-it-too-risky-investing-now" target="_blank"><span style="font-family: Arial, Helvetica, sans-serif;">continue on seekingalpha</span></a></div>
</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-29969059009532728232012-07-24T11:29:00.001+02:002012-07-24T11:29:21.845+02:00PMI indices: Euro zone outlook continues deteriorating<div dir="ltr" style="text-align: left;" trbidi="on">
In our article "<span itemprop="name"><a href="http://seekingalpha.com/article/736681-no-sign-of-relief-in-the-eurozone" target="_blank">No Sign Of Relief In The Eurozone</a>" we highlighted that the major business confidence indices due for release over this week should confirm that the Euro zone economic has been deteriorating fast. </span><br />
<span itemprop="name">The PMI indices for the Euro zone just released had mixed results despite confirning that an recovery is not coming anytime soon. Indeed, while the PMI manufacturing index unexpectedly fell from 45.1 to 44.1 vs market consensus at 45.2, the PMI services rose from 47.1 to 47.6 vs expectations for an unchanged reading. The PMI composite index remained unchanged at 46.4, a level in line with a 0.5% q/q contraction of the Euro zone GDP in Q3. </span><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAEdax8HPF-3pZ4p8Z8C8bc9IbuDyePbCk5xioEPZk-RnnoseWlKh-kDBavZqmgFP2RQ0E1dbWyId5hpbb9jFxb0mdHQ4T5PNDgE63vDntWueFwQd1_qZdKSmd77sy_xDyjN9r_I3mueyK/s1600/11.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAEdax8HPF-3pZ4p8Z8C8bc9IbuDyePbCk5xioEPZk-RnnoseWlKh-kDBavZqmgFP2RQ0E1dbWyId5hpbb9jFxb0mdHQ4T5PNDgE63vDntWueFwQd1_qZdKSmd77sy_xDyjN9r_I3mueyK/s320/11.jpg" width="320" /></a> </div>
</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-57509463029341499422012-07-24T09:40:00.000+02:002012-07-24T09:40:04.257+02:00Moody's cut the German outlook to negative. Rating unchanged at AAA<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">Moody's decided to cut yesterday the outlook for Germany, Luxembourg and the Netherlands to negative but confirmed the AAA rating. The rating agency explained in a statement that: "The level of uncertainty about the outlook for the area and the potential impact of plausible scenarios on member states, are no longer consistent with stable outlooks". </span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">The German Finance Ministry said the risks in the euro zone are “not new” and that Germany remains “in a very sound economic and financial situation.” In counterpoint to Moody’s, it cited the verdict of financial markets that have rewarded Germany with record low borrowing costs on government bonds.</span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">The Moody's announcement may have a limited impact on the financial markets. After S&P stripped France and the U.S. of AAA grades, interest rates paid by the countries to finance their deficits dropped rather than rose</span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">Some links on the topic:</span></div>
<div style="text-align: justify;">
<a href="http://www.telegraph.co.uk/finance/financialcrisis/9422206/Germanys-AAA-rating-under-threat-after-Moodys-cuts-outlook.html" target="_blank"><span style="font-family: Arial, Helvetica, sans-serif;">Germany's AAA rating under threat after Moody's cuts outlook</span></a></div>
<div style="text-align: justify;">
<a href="http://www.bloomberg.com/news/2012-07-23/germany-netherlands-rating-outlooks-cut-to-negative-by-moody-s.html" target="_blank"><span style="font-family: Arial, Helvetica, sans-serif;">Germany Pushes Back After Moody’s Lowers Rating Outlook</span></a></div>
</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-76095349073713149442012-07-23T16:53:00.000+02:002012-07-23T16:53:16.618+02:00Euro zone consumer confidence index at the lowest since 2009<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span lang="EN-US" style="font-family: "Arial","sans-serif"; font-size: 10pt; line-height: 120%; mso-ansi-language: EN-US;"><span style="font-family: Arial, Helvetica, sans-serif;">The European Commission consumer confidence index for
the Euro zone fell in July from -19.8 to -21.6, the lowest since 2009. A
rebound of the consumer confidence is unlikely until the outlook of the labour
market does not improve. The data is line with a further contraction of the
Euro zone GDP in Q3 and anticipates the continuation of the downward trend of the
PMI indices due for release tomorrow.</span></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZLNiicUxGWgZnbZJXdxITxRLAhBKJQN3tv9AuxGSGBcDJ-lsLqm4wooCptqa75TXbW9XGBarP3YSnNaHrRzV2Nl8MxkUlIUWwN4zV1BPD-kWwk02PaAw6Cu3-Sz_kAt587gj1J6Qjbvjv/s1600/5.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZLNiicUxGWgZnbZJXdxITxRLAhBKJQN3tv9AuxGSGBcDJ-lsLqm4wooCptqa75TXbW9XGBarP3YSnNaHrRzV2Nl8MxkUlIUWwN4zV1BPD-kWwk02PaAw6Cu3-Sz_kAt587gj1J6Qjbvjv/s320/5.jpg" width="320" /></a></div>
<div style="text-align: justify;">
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<div style="text-align: justify;">
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</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-10758979863568087012012-07-23T09:03:00.004+02:002012-07-23T09:03:55.107+02:00No Sign Of Relief In The Eurozone<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">Over the next week, the most important event in the <span>eurozone will be
the release of the business confidence indices for July in the <span>eurozone
(PMI indices) and in Germany (IFO index).</span></span></span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span></div>
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">We do not expect any improvement (</span><a href="http://seekingalpha.com/article/736681-no-sign-of-relief-in-the-eurozone" target="_blank"><span style="font-family: Arial, Helvetica, sans-serif;">continue on seekingalpha</span></a><span style="font-family: Arial, Helvetica, sans-serif;">)</span></div>
</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-76952743701015161262012-07-11T10:32:00.002+02:002012-07-11T10:32:21.796+02:00Is The EUR/USD Heading Toward 1?<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: justify;">
<span style="font-family: Arial, Helvetica, sans-serif;">Last week's ECB decision to cut the Refi Rate and the deposit by 25bp -
respectively to 0.75% and 0% - was not enough to push up the European equity
markets as the CB did not give any indication on a further easing of monetary
policy in the months ahead. (<a href="http://seekingalpha.com/article/711681-is-the-eur-usd-heading-toward-1" target="_blank">continue on seekinalpha</a>)...</span></div>
</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-61267123639441035302012-06-06T22:09:00.000+02:002012-06-06T22:09:02.498+02:00ECB: The EU Leaders Should Resolve The Debt Crisis<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Arial, Helvetica, sans-serif;">In line with consensus expectations, the ECB decided to left rates </span><span style="font-family: Arial, Helvetica, sans-serif;">unchanged at
1%. In the </span><a href="http://www.ecb.int/press/pressconf/2012/html/is120606.en.html" rel="nofollow"><span style="font-family: Arial, Helvetica, sans-serif;">press conference at the end of the meeting</span></a><span style="font-family: Arial, Helvetica, sans-serif;">, the ECB president
Mario Draghi downgraded the view on the economic outlook. Indeed (<a href="http://seekingalpha.com/article/641751-ecb-the-eu-leaders-should-resolve-the-debt-crisis" target="_blank">continue on seekingalpha</a>)...</span></div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-47494866804593938922012-05-02T17:00:00.000+02:002012-05-02T17:00:46.355+02:00Where Is Monetary Policy In The Western World Headed?<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: left;">
<span style="font-family: Arial, Helvetica, sans-serif;">The three major western Central Banks seem to have adopted a wait and see stance
recently. Over the last week, the Federal Reserve highlighted its neutral bias.
Chairman Bernanke said that (<a href="http://seekingalpha.com/article/543521-where-is-monetary-policy-in-the-western-world-headed" target="_blank">continue on seekingalpha</a>)</span></div>
</div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-43906074055276924032012-04-24T15:15:00.000+02:002012-04-24T15:15:30.929+02:00The negative outlook for the Euro zone<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Arial, Helvetica, sans-serif;">The major recent economic events were negative for the eurozone:</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">In France, the socialist candidate in the presidential election Mr.Hollande
won the first round with 28.46% of the vote to 27.06% for the incumbent
president Mr. Sarkozy.</span> <a href="http://seekingalpha.com/article/521181-the-eurozone-is-in-a-mess" target="_blank">continue on seekingalpha</a></div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-4732584619001699552011-11-21T11:19:00.002+01:002011-11-21T11:19:49.451+01:00The Week Ahead In The Eurozone: PMI Indices, German IFO And Spanish Election<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">In the Eurozone over next week fresh evidences that the economy may fall in recession in Q4 ’11 and further weaken in Q1 ’12 are expected from the <b>PMI indices for November</b>. Having fallen to 47.1 and to 46.4 respectively in October, both the PMI manufacturing and the PMI services may further decline in November: </span><a href="http://seekingalpha.com/article/308994-the-week-ahead-in-the-eurozone-pmi-indices-german-ifo-and-spanish-election"><span style="font-family: Arial, Helvetica, sans-serif;">continue on seekingalpha...</span></a></div></div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0tag:blogger.com,1999:blog-1730078890568028589.post-22634993614511815212011-11-17T08:43:00.000+01:002011-11-17T08:43:26.635+01:00A Look Into The Depths Of Europe's Recession<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">The ZEW index released on Tuesday 15th confirmed that the outlook for the German economy – and as a consequence of the whole of the Euro zone economy - may further deteriorate in the next few months. The most important economic indication in the next few days (<a href="http://seekingalpha.com/article/308478-a-look-into-the-depths-of-europe-s-recession">continue on seekingalpha</a>)</span></div></div>Matteo Radaellihttp://www.blogger.com/profile/03942224774387091144noreply@blogger.com0