ECB throws the kitchen sink, Irish growth at 15 year high
This afternoon the European Central Bank surprised markets with a more extensive than expected package aimed at supporting growth and inflation in the Euro area. This is welcome as the pace of economic growth had eased since the turn of the year thanks to slower momentum in both the Euro zone and weaker conditions from Emerging Markets.
Investors don't like Mondays!
The Boomtown Rats’ song “I don’t like Mondays” seemed like an appropriate tune for yesterday given the moves in markets. European and US stocks were hit hard yesterday with the EuroStoxx 600 down 3.7% (Eurostoxx 50 was down 3.3%) and the Dow and S&P 500 down around 2% for most of the session before rallying a little into the close to finish down just over 1%. Credit spreads also pushed higher leading to losses there. Bank shares were one of the sectors hit hardest yesterday with the Stoxx 600 Bank Index down 6%. Bank shares have been particularly weak over the past few sessions, with a suspicion that another bank related crisis is around the corner. Outside of the view that some selected banks may have extended themselves to commodity related sectors that are now in turmoil it’s difficult to see the bank sector causing a widespread crisis again a la 2008-9.
A symbolic day for the Fed
2006…….a year that saw the launch of Twitter, the musical re-launch of Take That, the cinema release of the Da Vinci code and the beginning of the last hiking cycle by the US Federal Reserve (yes it really is that long ago!). But last night the US Federal Reserve (Fed) embarked upon a new rate hiking cycle as it announced a 25 basis point increase in US interest rates. The move was widely expected, in fact it would have something of a shock if it had not happened given how FOMC voters had teed up investors in the past month or so.
Irish Economy continues to power along!
The Central Statistics Office released the National Accounts for Ireland for the third quarter of 2015 last week. The key headline was that real GDP grew by 1.4% meaning that GDP grew by 7% compared to the same quarter in 2014.
Q2 2015 Irish National Accounts - Economy grows by a whopping 6.7% in first half of 2015!
The Central Statistics Office yesterday published Irish national accounts for the second quarter of 2015. These accounts showed that the economy grew by 1.9% in both GNP and GDP terms in the quarter – a very strong performance (see table 1). On top of this the first quarter GDP growth estimate was increased to 2.1% from 1.4% previously, helped by stronger investment spending.