Europe/Middle East

Italian PM Renzi's Banking Challenge


The European Court of Justice upheld the principle of making creditors bear the burden for investment in banks that sour before government funds could be used.  Italian banks are particularly sensitive to the ruling, which cannot be appealed because the European Banking Authority and European Central Bank stress tests on July 29 are expected to show that some Italian banks are under-capitalized.

How Turkey Looks Post-Coup


After last Friday’s failed coup attempt in Turkey, a measure of calm has returned to global markets.  We did not think Turkish developments have wide-reaching implications for EM assets, but we do remain very negative on Turkish assets in the wake of the coup and ongoing political uncertainty.

Political Outlook

Making 'A Country that Works for Everyone' Work


Reining in big business? Chris Radburn / PA Wire

The most radical proposal for the extension of workplace democracy in a generation has been made not by Labour leader, Jeremy Corbyn, but by Theresa May, the UK’s new prime minister.

The Brexit is One of a Multitude of Issues Facing Philip Hammond


Headed for number 11. Dominic Lipinski / PA Wire

Philip Hammond, the UK’s new Chancellor of the Exchequer, has a lot on his plate. He faces a slowing economy urgently in need of stimulus. He confronts tough choices over public spending and will be under pressure to reverse the austerity policies of his predecessor. The question for Hammond is not whether to stimulate the economy, it is when and how.

Keep Spain on Your Radar


With Brexit, the pressure on Italian banks, and the surge and then sell-off in the yen, Spain may have been pushed off some investors' radar screens.  There are three important developments to note.

The EU Crisis Prevention Rules Probably Need a Rethink


The European Union, still nursing wounds from its crisis over the euro and “Grexit,” is facing a much more severe threat that strikes at the very heart of the EU’s legitimacy. In addition, the problem concerns the very measures put in place to resolve the earlier crisis, which nearly led to a Greece exit from the Eurozone.

From Political Disarray Comes the BOE's Carney as the Voice of Reason


Sterling is continuing to move lower.  It has tested the $1.3050 area in the North American morning, having been under pressure through the Asian session and the European morning.  That the UK economy is slowing down, materially, as BOE Governor Carney said, is not really new news. Nor is the fact that the BOE reversed its previous decision to force banks to boost their capital buffers.  This was anticipated last week.