Writing for Bloomberg‘s daily newsletter, Patrick Artus, Natixis’ Chief Economist, discusses the European Central Bank’s attempt to bring up inflation with quantitative easing (QE), which is markedly failing.
Through falling interest rates, rising asset prices and a depreciating euro, the central bank hopes to restore growth and inflation to the region. However, Artus points out that the ECB fails to acknowledge the financial risks posed by the monetary tool it has wielded since 2014.Certainly, faith in the power of monetary policy is wavering. The positive effects of QE on the euro area’s inflation rate is weak, if not non-existent. What expansionary monetary policy is succeeding at, however, is the creation of financial instability.
Despite this self awareness, the ECB refuses to give up on its objective of reviving inflation in the euro area – and so, Artus warns, we should expect its monetary policy to continue to become more and more expansionary, with very day posing a greater risk of financial collapse.
Abhishek Deshpande, Natixis’ Senior Oil Analyst, speaks to City AM on the recent price of oil, which has surged over $40 per barrel for the first time this year. Certainly, this shift in sentiment has brought hope that the 20-month price rout is finally coming to an end.
Indeed, crude has climbed by almost 50% from lows of $27 a barrel after sliding US production and discussions between Saudi Arabia and Russia eased fears that the price could fall below $20. Speaking to City AM, Deshpande says “Investors are responding to US production guidance that sounds very different from this time last year, while talks between Opec and Russia have been taken as a good sign,”.
The pressing question is, with a deal yet to be struck, will the oil glut to last into 2017 or potentially 2018?
To read the article, please click here.
Writing in FTSE Global Market‘s European Review, Patrick Artus, Natixis’ Chief Economist, evaluates whether the ECB will be able to scale down its monetary policy in the medium term, or if their expansionary programme is irreversible.
By assessing three different scenarios, Artus discusses how the ECB could escape its current policy and how its actions may impact the wider European economy. Ultimately, however, it is clear that the ECB must accept that its current expansionary monetary programme is irreversible. Certainly, the risks involved pose too much of a threat to the region’s economic health.
To read the article, please click here.
Natixis released their third quarterly results last week, showing net revenues up 9% in 3Q15 vs. 3Q14 and net income up 13% to €1,028m.
Natixis’ results show that despite difficult conditions during the summer, their core businesses increased revenues and profitability in line with their ‘New Frontier’ strategic plan, with high activity in structured financing (new loan production reaching €6.1bn in 3Q15 and €20bn in 9M15) and further strong growth in equity derivatives.
Laurent Mignon, Natixis Chief Executive Officer, said: ‘We continue to develop our businesses by serving our clients in France and abroad and particularly by reaping the benefits of diversification, both in terms of products and distribution in Asset Management, and by furthering the rollout of our large franchises within CIB.’
Following Moorgate’s outreach, the news was covered by Funds Europe, Bloomberg, Global Capital, Reuters, Dakota Financial News, Yahoo Finance, Euro Investor and 4-Traders
In Standard & Poor’s November edition of its Infrastructure Outlook newsletter – featuring all the key ratings updates and research relevant to infrastructure and project finance – Michael Wilkins, managing director, discusses the funding gap and financing surplus in EU infrastructure with industry experts. Together they explore the trend that despite there being record-low interest rates in the EU and the need to build and maintain infrastructure growing ever more apparent, governments do not seem to be taking advantage of the current market conditions. In agreement, the experts define austerity and affordability as the biggest barriers to investment.
The UK government, in particular, is struggling with the current deficit. Following an event hosted by the International Project Finance Association (IPFA), the National Audit Office (NAO) and S&P, this edition features an article on the growing ambition for new infrastructure investment in the UK. S&P’s Stefania Belisario continues the theme, also writing about the importance of infrastructure funding in Italy for their economic growth.
In other rating news, S&P has given solar power project Solaben Luxembourg a ‘BBB’ rating following its high availability levels, effective project management and limited maintenance risks. Meanwhile, S&P has lowered the Swedish-based utility Vattenfall rating to ‘BBB+’ due to difficult industry conditions and pressure on cash flows.
The feature also examines how environmental and climate risk factor into global corporate credit ratings.
To view the full version online, with accompanying videos, please click here.
Although a genuine economic revival appeared to be under way in Europe earlier this year, with buoyant equity markets and a renewed consumer confidence, that bout of optimism has proved fleeting as inflation levels remained low in Q3. In his latest FTSE Global Market blog, Natixis’ chief economist Patrick Artus looks at whether low inflation in Europe does pose a threat to growth, or whether it is merely an effect of the decline in commodity prices and low-level labour costs, which in the long-term will bolster wages.
To read Artus’ article, please click here
Writing for Institutional Investor’s Unconventional Wisdom column, Natixis’ chief economist Patrick Artus examines Europe’s struggles to achieve growth endogenously. Certainly, the eurozone’s economy has shown signs of a pick-up, but if we take a number of extraneous factors – such as oil prices and the depreciating euro – out of the equation, underlying growth in the eurozone is in fact flat.
Indeed, these factors will not last and Europe will soon plunge back into recession if it does not address it’s decline in corporate investment, insufficient labour force skills and productivity, and excessive private saving.
To read the whole article, please click here.
Following the release of its 2015 Global Survey on trade finance, the International Chamber of Commerce (ICC) talks to TXF about the importance of securing financing for SMEs in order to boost global trade.
Vincent O’Brain, chair of the ICC Banking Commission Market Intelligence, discusses the impact of trade finance gaps and regulatory initiatives on SMEs, and identifies alternative sources of financing to continue funding SMEs’ business operations, and as a result, stimulate further trade.
To read the full article, please click here
Andrew Reid, Head of Cash Management Corporates for EMEA, Deutsche Bank, looks forwards from the one-year anniversary of compliance, to the possible advances ahead.
Reid explains in Banking Technology ‘SEPA’s technological achievements can be leveraged further. For example, the data-rich nature of the ISO 20022 XML standard and the fact that it is now the sole format used across the region has made many existing tools more accessible, and made the development and application of others possible’.
To read the full article, please click here.
Daniel Schmand, Head of Trade Finance & Cash Management Corporates EMEA, Deutsche Bank, and Chair of the ICC Banking Commission, writes The Banker‘s Bracken column on banks’ role in society.
Schmand wants to improve the dialogue between banks, clients and regulators, and discusses everything from trade finance to geopolitical risk in this piece.
To read the full article, please click here (registration mandatory).