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November 29, 2019

China Banking Monitor

Bank assets growth picked up to 7.7% in Q3 2019 supported by a higher loan growth rate. Assets quality worsened and diverged among big and smaller banks. Capital adequacy ratio dropped on faster growth in risk-weighted assets, small banks are facing deteriorating conditions in funding through NCDs and bond market.

November 1, 2019

China | LPR: China’s Market-based “Policy” Rate

China’s central bank announced the elimination of its previous benchmark lending rate as monetary policy rate. Moreover, they made a market-driven Loan Prime Rate (LPR) as the reference rate for banks to price their financial products. It signals the transformation of “dual-track” system to the new “single-track” system.

October 22, 2019

China Economic Outlook. Fourth Quarter 2019

The Q3 GDP growth slowed to 6% y/y, the lowest growth rate for the past three decades. The prospect of China’s economy hinges on the development of trade talks with the US at the current stage. The two sides recently tried to pursue a partial agreement first and leave the thorny part of negotiation to the next phases.

September 16, 2019

China | Growth slowdown confirmed in August

A batch of August indicators announced today pointed to a significant slowdown in economic activities this summer. Together with the previously released trade and credit data, it suggests that the escalating uncertainties from the US-China trade war dampened people’s confidence and hamper economic expansion.

September 13, 2019

Country Risk Quarterly Report. Third Quarter 2019

The search for yield and looser monetary policies across the board, favor sovereign spreads compression, despite a worsening global outlook, poorer incoming data and balance of risks, and the lack of improvement of fiscal disequilibria.

September 12, 2019

Turkey | The last bold cut… now time for fine tuning

The Central Bank of Turkey (CBRT) reduced the policy rate by 325 bps from 19.75% to 16.50%. The movement was higher than expected (Consensus 275 bps) but the reaction of financial markets to today´s decision was positive as the CBRT justified the movement with a faster than expected disinflation in the statement.

September 3, 2019

Turkey | August inflation surprised on the downside

Consumer prices increased by 0.86% mom in August, far below the consensus and ours (1.3% Bloomberg vs. 1.4% BBVA Research). Annual inflation decreased from 16.65% in July to 15%, the lowest level in the last 15 months. We maintain our year-end forecast of 15% with downside risks.

September 2, 2019

Turkey: Growth in 2Q surprised market on the upside

Turkish Economy contracted by 1.5% in annual terms in 2Q19, better than market expectation but worse than ours (-2% Consensus vs. -1% BBVA Research). In quarterly terms, the economy grew at 1.2%, avoiding the “W” pattern but moderating from 1.6% QoQ in 1Q19. We still maintain our GDP growth forecast at 0.3% for 2019.