Daily Insight
Group Economics Macro & Financial Markets Research
09 November 2015
Spain’s Catalan struggle Aline Schuiling
Spain’s Catalan regional parliament set for independence roadmap…
Senior Economist
…obstacles mean that the process is unlikely to succeed
Tel: +31 20 343 5606
ECB officials tell Reuters that there is consensus for deposit rate cut,
aline.schuiling@nl.abnamro.com
while QE options still in discussion Nick Kounis Head Macro & Financial Markets Research
Spain’s Catalan regional parliament starts walking the road to independence
Tel: +31 20 343 5616
The regional parliament of Catalonia, representing a region that has a share of around
nick.kounis@nl.abnamro.com
19% in Spain’s GDP, voted in favour of a resolution to set up a roadmap for an independence process on Monday. The pro-independence parties Junts pel Si and CUP won a majority of the seats in the Catalan parliament during the 27 September regional election, but did not win the majority of votes. The parties of the pro-independence group are on opposite ends of the political spectrum and the only issue binding them together is the pursuit for independence. Therefore, it is no surprise that the item was on the agenda at the first parliamentary session following the elections. According to reports in the press, the text of the resolution gives parliament 30 days to start working on a new Catalan constitution, which would later be voted on in a referendum. Moreover, the regional parliament should begin establishing a new tax office and social security administration. Catalan independence does not seem likely That said, the regional parliament’s quest for independence will likely fail. To start with, the fact that the pro-independence parities did not get the majority of the votes during the 27 September elections is limiting the chances of a “yes” victory during an independence referendum. Moreover, Spain’s prime minister Mariano Rajoy has vowed to take legal action against the Catalan parliament if it were to declare independence, while Spain’s constitutional court has already stated that any declaration of independence would be illegal. Finally, European leaders have warned that Catalonia would have to ask to be readmitted to the EU following independence, while countries such as Belgium, Italy and the UK, which have pro-independence regions within their own borders as well, will probably hinder re-entrance. ECB consensus around deposit rate cut – QE discussions ongoing Meanwhile, the debate on the ECB’s next steps continues to rage. Reuters gave an update on the issue, quoting a number of unnamed Governing Council members. According to the officials, a consensus was forming for the option of a cut in the deposit
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2
Daily Insig ght – Spain’s s Catalan sttruggle – 10 November 2015
rate as s it was the lea ast contentious proposal on th he table. The reemaining issue e is the size of the reduction, with h some officials s arguing that the cut should bbe more than the 10bp widely expected by fiinancial markets. The Govern ning Council is still considerin ng options to nhance its QE programme. According A to the e officials, the E ECB is working g with 20 also en different action propo osals, mostly re elating to assett purchases. Thhe Committees s will narrow t options in tthe run-up to th he December Governing G Couuncil meeting. down the xpect 10bp dep posit rate cut,, and stepping g up of QE We ex Our ba ase scenario re emains that the e ECB will act in December. W We expect a 10 0bp reduction in the depo osit rate and a EUR 20 increa ase in the size oof its monthly asset a purcha ases. We think that the chanc ces of more aggressive actionn have fallen given the recent decline in the EUR/USD rate e, which has be een driven by rrising expectations of a Decem mber Fed rate h hike. Indeed, at just below 1.0 08, EUR/USD iis now below th he levels (of 1.10) assumed a in the e ECB’s Septem mber inflation projections. p Soo we do not thin nk it currently will judge th hat it needs to overwhelm o fina ancial markets to the extent th hat it did gramme earlier this year. when iti first announcced its QE prog
ECB assumptions s versus currrent outcomes s $ per barrel
EUR/USD D
54
1.17 7
52
1.15 5
50
1.13 3
48 1.11 1
46
1.09 9
44 42 12-A Aug
1.07 7 1-Sep
21-Sep
11-Oct
31-Oct
Oil Brent USD D/barrel (lhs)
ECB projeection rest 2015
EUR/USD (rhs)
ECB projeection rest 2015
Source: Thomson Reuterrs Datastream, EC CB September Sta aff Projections
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Daily Insig ght – Spain’s s Catalan sttruggle – 10 November 2015
Day
Date
Sunday Sunday
08/11/2015 08/11/2015
Monday Monday
09/11/2015 09/11/2015
Tuesday Tuesday Tuesday Tuesday Tuesday
Tim me
Country
Key Econ nomic Indicators and d Events
Period
Latestt outcome
Consen nsus
Oct Oct
-3.7 -20.4
-3.2 2 -15..2
ABN AMRO
CN CN
Exxports - % yoy Im mports - % yoy
0:00 09:00 15:45 5:00
CH EC
To otal Sight Deposits bn b EC CB announces weekkly QE details
10/11/2015 10/11/2015 10/11/2015 10/11/2015 10/11/2015
02:30 0:00 12:00 0:00 15/11//2015 15/11//2015 15/11//2015
CN US CN CN CN
CP PI - % yoy NF FIB small business optimisme - index M2 2 money growth - % yoy Ne ew yuan loans - CNY Y bn Ag ggregate financing - CNY bn
Oct Oct Oct Oct Oct
1.6 96.1 9 1 13.1 10 050.0 13 302.8
1.5 5 96.2 2 13.2 2 800 .0 1000 0.0
Wednesday Wednesday Wednesday Wednesday Wednesday
11/11/2015 11/11/2015 11/11/2015 11/11/2015 11/11/2015
06:30 0:00 06:30 0:00 06:30 0:00 10:30 0:00 10:30 0:00
CN CN CN GB GB
Fixxed investment - % yoy y Re etail sales - % yoy Ind dustrial production - % yoy Cl aimant count unem ployment rate - % Ch hange in claimant co ount - thousands
Oct Oct Oct Oct Oct
10.3 1 1 10.9 5.7 2.3 4.6
10.2 2 10.9 8 5.8 2.3 3 0.9 9
Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday
12/11/2015 12/11/2015 12/11/2015 12/11/2015 12/11/2015 12/11/2015 12/11/2015 12/11/2015 12/11/2015 12/11/2015
00:50 0:00 08:00 0:00 11:00 0:00 13:00 0:00 14:30 0:00 15:30 0:00 16:00 0:00
Ma achinery orders priva ate sector - % mom CP PI - % yoy Ind dustrial production - % mom CP PI - % yoy Iniitial jobless claims - thousands Ye ellen makes welcom ming remarks at Fed d Policy Conference US S Job Openings by Industry I Po olicy rate - % GD DP - % yoy Du udley speaks on eco onomy and policy in New York
Sep Oct F Sep Oct Nov 7
-5.7 0.3 -0.5 4.4 276
3.6 6 0.3 3 -0.1
-0.3
Sep Nov 12 3Q A
5370 5 1.5 -4.6
5 1.5 -4.4 4
-4.4
5:00 18:15
JP DE EC IN US US US KR RU US
Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday
13/11/2015 13/11/2015 13/11/2015 13/11/2015 13/11/2015 13/11/2015 13/11/2015 13/11/2015 13/11/2015 13/11/2015 13/11/2015
00:00 0:00 05:30 0:00 06:30 0:00 07:30 0:00 08:00 0:00 11:00 0:00 14:30 0:00 14:30 0:00 14:30 0:00 16:00 0:00 16:00 0:00
US JP NL FR DE EC US US US US US
Fisscher speaks on fin ancial stability and monetary policy Ind dustrial production - % mom GD DP - % qoq GD DP - % qoq GD DP - % qoq GD DP - % qoq Re etail sales - % mom m Prrod. prices index - % mom Prrod. prices index exccl food and energy - % mom Bu usiness inventories - % mom Un niv. of Michigan conss. confidence - indexx
Sep F 3Q P 3Q P 3Q P 3Q A Oct Oct Oct Sep Nov P
1.0 0.2 0.0 0.4 0.4 0.1 -0.5 -0.3 0.0 9 90.0
3 0.3 0.3 3 0.4 4 0.2 2 0.1 1 0.1 1 0.0 0 91.1
97.0
0.5 0.4 0.3 0.4 0.2
92.0
Source: Bloombe erg, Reuters, ABN AMRO Group Eco onomics (we provide e own forecasts on nly for selected k eyy variables and eve ents)
nd out more abo out Group Eco onomics at: http ps://insights.a abnamro.nl/en n/ Fin
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