Sunday, December 23, 2012

23/12/2012: Q4 2012 Global Risk Analysis from BBVA - part 1

Few interesting risk mappings for December 2012 from BBVA Research:

Per BBVA, through Q4 2012:

"The Western Central Banks “Put” drives financial tensions back to normal in both US and European
Markets. But some segments still “under pressure” (banks and interest rates). Emerging Markets among the most benefited markets during the quarter. The Central Banks actions leads EM Europe below the neutral area thanks to the diminishing Euro convertibility risk. Asian and to a lesser extent Latam financial pressure enter also in the very low tension area."

My view - don't be complacent on Latin America and some Asian markets - keep an eye out for Grey Swans (see my note here).

A nice chart showing easing of pressures in the sovereign CDS markets:

Nice performance for the Peripherals, but... caveat emptor - CDS markets might be singing a song of no content (see here).

Ratings agencies moves summary:
Note that Ireland is the longest running stressed ratings sovereign other than Hungary (shallower downgrades, albeit to below junk ratings). Which puts into perspective the irish Government claims to the success of Irish programme. In reality, we've been down for longer than anyone else, so everything else held equal, we should be expected to come of it earlier too. So far, however, there have been no upgrades (that's right, despite Irish Government claims - example here):

Here's an interesting risk radar map:
And same for Spain and Italy:
 and for Greece, Portugal and Ireland:

See the next post for more from BBVA Research...
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