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’Measuring Italian-ski exposure
Italian jitters, alas, have not dissipated on Thursday. The sovereign was forced to pay severely high yields (some at records) on the sale of nearly €3bn in new bonds, in what many described as a make-or-break test of investor confidence for the eurozone.
When Latvian interbank rates trade through Euribor
Here’s an interesting datapoint unearthed up by BNP Paribas’ emerging markets deak on Monday.
The Latvian interbank rate — Rigibor — is trading through Euribor for the first time in four years…
…
Consulting the Greek CDS oracle
Forecasting the fate of nations has never been easy.
Take for example the story of King Croesus of Lydia, told by Greek historian Herodotus.
In trying to decide upon a campaign against the Persians,
Managing CEE’s FX addiction
Here’s a great chart from Reuters showing just how addicted many countries in emerging Europe have become to borrowing in foreign currency for everything from second homes to TV sets :
As Reuters notes,
More on Greek bond spreads
Last week, the spread between Greek bonds and German bunds widened to its widest since April after the Greek central bank warned domestic lenders they would have to wean themselves of ECB liquidity measures.
Looking at European retail rentals
Commercial real-estate brokers Cushman & Wakefield have put out their September global retail rental market report and it makes for some interesting reading.
In particular, the writers observe some dramatic regional splits within Europe.
Banks’ coverage ratio capers, cont.
Look who’s jumped on the bad bank coverage ratio bandwagon — Goldman Sachs.
In a note out today, GS analysts, are also looking at how falling coverage of non-performing loans (NPLs) has fueled this year’s profits among European banks.
A ‘game-changer’ for the euro – and a coming CHF bloc
Morgan Stanley’s currency expert and emerging markets strategist Stephen Jen has been quick to leap on the significance of the push to give the IMF extra funds to channel to Eastern Europe. Citing what he calls a “game changer”
The Eastern European carry-trade meltdown, reviewed
As reported here previously, much of the panic surrounding western European exposure to CEE fragility was focused on a particular set of BIS figures, a number amounting to some $1,700bn ‘reflecting total foreign claims’ from the region.
CEE’s stand against SPECTRE-lators
The interesting thing about the Central and Eastern European crisis is how quickly it turned. Even six months ago, economists and city analysts were saying more established markets like Poland and the Czech Republic would sail through the financial crisis largely unscathed.
EU to CEE: ‘Non’
Writing on Friday ahead of the EU summit, Erik Berglöf, chief economist at the European Bank for Reconstruction and Development, said (our emphasis):
There is much to suggest that it was the belief that EU’s leaders will stand by Eastern Europe that prevented a full-blown meltdown last week.
Eastern Europe gets €24.5bn
Eastern Europe has received its own special bailout after all. Well, not technically a bailout, it comes as “aid” via the World Bank, European Bank for Reconstruction and Development and the European Investment Bank in a bid support the region through its first technical recession since the breakdown of the communist system.
Latvia junked
Does the domino begin here? Poor Standards Standard & Poors junks Latvia (our emphasis):
Feb 24 – Standard & Poor’s Ratings Services today said it had lowered its sovereign credit ratings on the Republic of Latvia to ‘BB+/B’ from ‘BBB-/A-3′ and removed the ratings from CreditWatch negative,
CEE’s western exposure
CEE currencies were on the ascent on Monday, alongside stocks in Warsaw. That was ahead of a much-awaited interest rate decision by the Hungarian central bank at 1pm GMT. The MNB was expected to hold rates despite worsening economic data which would normally warrant an interest rate cut just to support the forint.
CEE under heavy fire
The troubles facing central and eastern Europe intensify on Tuesday with news of further downgrades to western banks by Moody’s due to losses in the region. As Bloomberg reports (our emphasis):
Feb.