IFR International - 20.10.2018

Tax ruling hits Spanish banks as

contagion fears grow

Domestic banks in the crosshairs following surprise decision

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THEYûWROTEûINûAûNOTE

Alice Gledhill

WEEK IN NUMBERS

US$2bn

„ RIDE HAILING COMPANY UBER

TECHNOLOGIES INCREASED THE SIZE OF

ITS DEBUT HIGH-YIELD BOND LAST WEEK

TO US$2bn FROM US$1.5bn

273bp

„ THE SPREAD BETWEEN 10-YEAR

TREASURIES AND BUNDS, THE HIGHEST

SINCE 1988, AFTER FED MINUTES FROM

SEPTEMBER’S FOMC SHOW POLICYMAKERS

LARGELY UNITED ON THE NEED TO RAISE

BORROWING COSTS FURTHER

€3bn

„ THE AMOUNT OF APRIL 2020 BTP ITALIA

BONDS THE SOVEREIGN IS OFFERING

TO BUY, WHICH IT WILL FUND THROUGH

A SERIES OF TAPS. THE MOVE HIT THE

WIDER BTP MARKET

35%

„ THE PERCENTAGE OF RESPONDENTS

TO A MONTHLY BAML INVESTOR SURVEY

WHO THINK A TRADE WAR IS THE BIGGEST

TAIL RISK, WHILE CONCERNS ABOUT

TIGHTENING POLICIES IS THE SECOND

BIGGEST CONCERN

€744m

„ THE AMOUNT THE ECB BOUGHT

THROUGH ITS CSPP IN TRADES SETTLED

IN THE WEEK UP TO OCTOBER 12

In total, it has bought €171.80bn

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

04/1/8804/1/9004/1/9204/1/9404/1/9604/1/9804/1/0004/1/0204/1/0404/1/0604/1/0804/1/1004/1/1204/1/1404/1/1604/1/18

%

0

5

10

15

20

25

30

35

40

China

slowdown

Quantitative

tightening

Trade war

%

Source: BAML

Three biggest tail risks

Source: Refinitiv

0

50

100

150

200

250

300

15/01 15/03 15/05 15/07 15/09

2018

Spread (bp)

BUFFETED BY POLITICAL STORM
UNICREDIT €1.5bn 1% JAN 2023 SNP PERFORMANCE YTD