Evolution of the Euribor

Although quite analysts spoke of more cuts in official rates of money in the last meeting of the European Central Bank (ECB) in January this year, the macroeconomic situation in the euro zone has not allowed/advised it.

The newly ECB is giving good solutions to the endemic problems of the euro and, as such, is very close to the market. The historic slow reaction of this body is out now.

Just read carefully proceedings and publications of the ECB which provides data for analysis and forecasting for future situations.

In its latest Monthly Bulletin of January (and earlier) you can see that the evolution of the M1 and M3 money supply grew so strong as in the first quarters of 2009, where it was compensating for the potential collapse of the world financial system after Lehman Brothers’ Default with unorthodox policies or quantitative expansions (QE).

The evolution of gross domestic product (GDP) in the euro area (EMU) (*) and its forecast for 2013 keep pace forcing the issue of Banknotes and Debt purchases if you will, as different governments, still continue on the path of fiscal consolidation.

This substantial injection of money allows the Commodity money, but at idle, do not stop and have a slight rise in inflation of goods and services produced, and the price of money (Euribor all ages) reacts consequently upward since last December.

(The monetary authorities and regulatory bodies do not see problem on that as soon as the tax effect of inflation is going down: you can not keep raising taxes so as marked and fees in any country in the euro zone as disposable income is low and the EMU GDP denotes so. (*))

In short, change the medium-term trend in interest rates, which can change when decisions take place about debt or surplus (investment).

(All observations and reviews are based on official documentation that provides quantitative data in most cases and own mathematical models correlations.)

January 24th, 2013 by Albert Vila | Categories: Banks, Macroeconomics

Leave a Reply

Required fields are marked *