Economic situation after the first months of 2020
The markets ended January with corrections affecting risk assets, despite optimism over the signing of an initial trade agreement between USA and China, improved growth prospects and central banks committing to accommodative monetary policy.
Weekly keys: What is happening this week?
Bad GDP figures for the last quarter in Germany (0.0%), and particularly Japan (-1.6%), highlight the economic growth problems being experienced in certain developed countries.
Impact of the coronavirus on the economy and markets
The coronavirus is generating economic and financial uncertainty. It is still too soon to have a clear understanding of what economic impact the outbreak will have in China.
The value of assets and the important role of professional investors
The main assets offer far less value over the next 10 years in terms of anticipated yield than was the case over the last decade.
The positive balance and challenges for 2020
The financial markets, supported by the actions of the world’s central banks, have performed very well during 2019, which has allowed us to offer our customers very significant returns in an environment of low-interest rates and moderate economic growth.
The importance of emotions in the world of investment
Traditional theories of finance tend to see people as rational beings who try to maximize utility and have perfect information. But are we humans like that? The answer is not. Sometimes we humans are rational, but at other times we are guided by our emotions or look for shortcuts, given our inability to process all available information.
The Federal Reserve lowers the reference rates and applies new stimuli
The Central Bank of the United States (Fed) has again lowered the reference rates for the third consecutive time during 2019. Far are the forecasts of rate hikes at the end of 2018 when our forecast was, and continues to be, that the Federal Reserve won’t be able to upload them for a long time (years) and there is still a long way down.
Are we facing a new economic crisis?
The manufacturing ISM is an indicator of activity, widely used to anticipate the behaviour of the economy. When it is above 50 it indicates that we are in an area of economic expansion, while if it is below that level it points towards increasing risks that a period of economic contraction may occur. In the […]
Oil and geopolitical risk
Geopolitical risk increases affecting the price of certain commodities in the short term, although its long-term influence, is very low we do not advise basing investments on it.
Investors are holding fire from the central banks
Somewhat surprisingly, we’re still seeing global investors paying an inordinate amount of attention to the decisions from the central banks in general and the Federal Reserve in particular.
The Argentine authorities seek to extend the maturities of government debt
The Argentine authorities seek to extend the maturities of more than 100 billion dollars of government debt, which includes over 50 billion of the International Monetary Fund (IMF).
Are we facing the imminent collapse of equities?
We are actually reading, in websites specialised in financial activity, about the imminent collapse of the equity indices or the divergence between the macroeconomic situation and the U.S. indices, which are close to record highs. What future is there for equities?
The Federal Reserve cuts rates for the first time in ten years
Las autoridades monetarias estadounidenses han recortado un 0,25% las tasas oficiales de la mayor economía mundial, situando el precio del dinero en el rango 2,25% – 2,00%.
The global economic deterioration forces to lower the reference rates
The global economic downturn has once more obliged the U.S. Federal Reserve (Fed) to change its monetary policy and begin to cut its official rates.
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.