“Continued trend of downward STOXX 600 earnings revisions. Over the past month, 2014 earnings estimates have declined by 1.5%. 2014 consensus earnings growth is now expected to be +8.4%.” (Goldman Sachs)
If the underlying economic situation is improving, we should be able to see growing credit demand.
“Euro area bank lending to non-financial corporations declined by €12.6bn in February – signals some renewed weakness in lending after rate of contraction had moderated over past few months. By country, the largest decline in lending to NFCs occurred in Italy, where bank lending dynamics continue to be weak with a further fall of €3.7bn. Credit flows also fell in Spain (-€1.7bn). The stock of loans outstanding has contracted by 30% in Spain and by almost 8% in Italy since July 2011.” (Goldman Sachs)
Bundesbank’s president Jens Weidmann seems to have changed his view on QE.
“Bundesbank President Weidmann said ECB could consider purchasing euro zone government bonds or top-rated private sector assets marking radical softening of stance on contested policy. The European Central Bank could buy loans and other assets from banks to help support the euro zone economy, Germany’s Bundesbank said.” (Reuters)