The Federal Reserve facing the loss of economic dynamism
Preliminary US activity indicators point to this loss of economic dynamism in the U.S. occurring in the second half of the year.
The probability of recession in the US increases significantly
Based on the Federal Reserve Bank of New York index, the probability that the United States will fall into recession in the next twelve months has increased significantly.
Equity market analysis and valuations
Equity market valuations are at historically very high levels, which implies that long-term yields for investors will be lower than in the past.
Monetary normalisation in the US and its effects
At the end of 2015, the Federal Reserve began the process of removing the extraordinary monetary policy accommodation that it had introduced to help stimulate the economy in the wake of the 2008 financial crisis (the “Great Recession”). However, the Fed’s monetary normalisation could see this situation gradually change.
Why is United States stronger than the rest of the world?
During 2018 we witnessed a stronger divergence of behavior between the United States and the rest of the countries. The US stock market registers a revaluation close to two digits, while other markets such as emerging countries or Europe, are in negative positions.
Consequences of the monetary policy of the Federal Reserve
Only a few months ago we commented on the process of increases in reference rates by the Federal Reserve of the United States and how this process can affect the economy and the financial markets. It may be interesting to return to the subject given the situation of some countries and the dynamics of the global economy in recent weeks.
The peculiar year for equity
This has obviously been a peculiar year, with differentiated movements; equities have been range-bound in the US, but sustained sharp corrections in other markets.
The effects of a strong dollar on the economy
During May and June we have seen a major appreciation in the USD, US Dollar, in relation to the rest of the global currencies, especially with respect to certain emerging countries’ currencies, such as the Argentine peso and the Turkish lira.
Next steps in the Eurozone’s monetary policy
The European Central Bank’s recent meeting and its decision not to raise rates until the summer of 2019 is an excellent opportunity to perform an analysis on the next steps in the Eurozone’s monetary policy.
The importance of US interest rates
Over the last two years, we have witnessed interest rate increases by the US Central Bank (Fed), from the levels of 0% a few years ago, to the current 1.75%. This rise of 1.75% has occurred at a lower rate than in previous periods, which may have caused us to be unaware of its importance and its influence on the global economy.
Family businesses: Why do they survive?
Family businesses can become a source of conflict between the different members making up the it. However, why are there businesses that have been very successful in generational change and others that have not? Discover with BBVA in Switzerland how a family protocol can contribute to success.
Consequences of the euro-dollar volatility
The low volatility during the first quarter of 2018 appears to have come to an end. A look at the euro-dollar (EURUSD) exchange rate shows a marked change in price after the first rate rise this year, in a decision taken by the FED in its last meeting on 21 March, while awaiting the definitive consolidation of the inflation data in the US.
Investment trends in private banking
The global economic reality has changed significantly over the past few years impacting decisively on the style and way in which investors manage their wealth.
Positive indicators for 2018
Joaquín García Huerga, Global Strategy Director from BBVA Asset Management, pick out from their management their forecast for economies and markets at 2018.
Great moment for the global growth
Jorge Sicilia, Chief Economist of BBVA Group and Managing Director of BBVA Research, explains the keys why global growth stands at its greatest moment since the last ten years and provides a regional forecast.
Economic fragility despite of positive figures
Most of the developed countries continue publishing positive macroeconomic figures and those reflecting growth and economic activity in particular. This could have an important effect on the trend in global financial asset prices.
The expected trend in benchmark rates
At the end of 2015, the US Federal Reserve began official rate hikes at a much slower pace than on other occasions and with no apparent reasons for doing so, because neither inflation nor economic growth had passed thresholds for concern.
The effects of monetary policy on the Eurozone
The appearance of European Central Bank President Mario Draghi on Thursday 20 July last, when he was expected to give details of a possible turnaround in the central bank’s current monetary policy, eventually had little repercussion.
The euro pressure against dollar
The latest remarks by ECB president Mario Draghi do nothing but confirm that Europe’s highest monetary institution is in no hurry to raise interest rates from their current –0.4%. On the other side of the Atlantic, alternatively, the discourse from the US Federal Reserve is indicating at least one further rate hike in 2017, thus accumulating four increases in 18 months. Such an outstanding difference makes the dollar more attractive than the euro in the medium term.
The US stock markets break their all-time high records
In July, the S&P 500, which represents the capitalisation of the largest US corporations, reached all-time highs in North American stock markets, accumulating important yields in recent years.
Brexit’s uncertain future
The latest elections held in the United Kingdom on 8 June last have revealed a scenario of political uncertainty in the country, aggravated by recent outbreaks of social unrest suffered in Manchester and London, which have weakened Britain’s interests in its political aspirations vis-à-vis the negotiation of the future of the Brexit with the European Union.
How does the monetary politics affect our portfolios?
Draghi’s statements at the end of June indicating that reflationary forces (higher nominal growth and inflation) were replacing the deflationary fears of previous quarters, had a swift impact on the financial markets, producing sharp increases in long-term interest rates and a subsequent fall in bond prices across almost all the geographic regions.
The world stock market hits new all-time highs
The intense momentum or positive inertia on the financial markets today has catapulted world equity indices to new all-time highs, particularly highlighting the monthly performance both by countries in Europe, driven by the election results in France and those more closely tied to the emerging economies.