Yields 4: European markets open higher (Eurostoxx futures +0.5%, S&P futures -0.1%) after a session of less to more on Wall Street, and on a day in which the most relevant will be the ISM services report in the US, which could fall in February (54.5e and 55.2 previously), and where the main focus will be on its price component, with upside risk after the strong rebound seen in the…
Renta 4 : A flat European opening, in a session in which around 25 of our companies in coverage will publish 4Q22 results and where the macroeconomic focus will be on the first inflation data for February in Europe. On the Japanese side, consumption in January was good (retail sales +1.9% vs +0.4%e and +1.1% previously) but manufacturing was weak (industrial production -4.6% vs -2.9%e and +0.3% previously). Today we…
Divacons / Norbolsa | A total of five Spanish banks are in the ECB’s top 20 in terms of assuming lower capital requirements in what is known as Pillar 2 by 2023, according to supervisory data published yesterday by the ECB. According to Alphavale-Divacons, these are Kutxabank, Bankinter, Santander, Caixabank and BBVA. Kutxabank is the Spanish institution that has received the lowest capital ratio for this year in Pillar 2,…
Annalisa Piazza (MFS Investment Management) | The ECB hiked policy rates by 50bp and pre-committed to hike by another 50bp in March. The depo rate now stands at 2.50%. Looking ahead, the ECB is widely committed to keep rates in restrictive territory to reach the inflation target in the medium term. The overall communication by the ECB remains relatively hawkish as the policy stance remains restrictive. That said, the market…
Link Securities | European Central Bank (ECB) President Christine Lagarde said on Friday that “staying the course” is her mantra on monetary policy and urged central banks around the world to do the same to achieve output recovery. Lagarde described 2022 as “a strange, strange year” as the low growth figures seen in the world’s largest economies were “not usual”. However, she expressed hope that “cooperatives, consumers, and state policymakers…
Singular Bank | The ECB revises and determines minimum capital requirements for each lender annually so that, in function of its own funds, it has an established guarantee of solvency. In this respect, for 2023, BBVA will have to have a CET1 ratio of 8.72% (vs 8.60% in 2022) and a total capital level of 12.97% (vs 12.76%). In the case of Sabadell, the CET1 will have to be 8.65%, compared…
Annalisa Piazza (MFS Investment Management) | The ECB is committed to continue to increase rates significantly, at a steady pace and to keep rates in restrictive territory until the medium inflation target returns to target. The central bank announced that it will start quantitative tightening (QT) related to the APP at the beginning of March 2023, with a “measured and predictable pace”, allowing the Eurosystem balance sheet to decline by…
Germán García Mellado (A&G) | Regarding interest rates, we expect a 50 basis point rise for Thursday’s meeting, placing the deposit facility at 2%. We do not believe that Lagarde will specify the steps to be taken for the first meetings in 2023 or detail the terminal rate of this cycle of rate hikes. She will therefore maintain a stance similar to that shown since the post-summer meetings, in which…
The opinion of the European Central Bank (ECB) on the new bank tax, which is currently before Congress, is already public. The banking supervisor has issued a tough and detailed opinion in which it warns of the negative effects that the tax, as it is designed, could have on the banking sector, such as damage to profitability, competition, solvency and the granting of credit, while warning of the risks of…
J.P. Marín-Arrese | Pressed by a skyrocketing headline and core inflation, the ECB took the boldest step in its history when it raised rates by 75 basis points. Further hikes will follow in a desperate attempt to curb the current price spiral. Will they achieve this goal? For all the bombastic claims made by Christine Lagarde, there is good reason to doubt the ECB might solve such an entrenched problem….