Every now and then Michael Hewson, Senior Market Analyst @ CMC and Megan Greene, Chief Economist @ Maverick Intelligence, get together to give a medium/long-term view of the economic events. This video is about 18 minutes long and discusses the current problems in Europe:
  • Once you remove anyone in training or higher education, Italy has the highest level of youth unemployment in the Euro zone. Italy also has worsening economic data across the board and we could have a new election sooner rather than later. Berlusconi may well be back.
  • Portugal also has an unstable government but the Troika is likely to be lenient in its review of the country (despite Portugal missing bailout targets).
  • Greece is in a rather similar position to Portugal
  • Spain is not in a great place either but has the added colour of a large-and-on-going corruption scandal surrounding the PM
Plus:
  • The tapering by the US Fed has helped push bond yields up. However, whilst the current bond levels are expensive, Italy and Spain can still afford them for now
  • European banking union, how likely is it? And what format would it take?
  • Bail-ins are more likely than bail-outs and Cyprus is the new template (for now)
  • France…
  • A potentially weaker euro but not euro-dollar parity
  • And…”we’re heading for a very, very big train wreck”
  Video content by Michael Hewson of CMC Markets. Content provided by CMC Markets. CMC Markets UK plc and CMC Spreadbet plc are authorised and regulated by the Financial Services Authority in the UK, registered offices, 133 Houndsditch, London, EC3A 7BX.