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ARGENTINA

July Economic Activity Rises Ahead Of Estimates

EURJPY TECHS

Above 130.00

US TSYS

Curve Steepens Further, 2y10y  Highest Since June

OPTIONS

Largely Downside In ED Midcurves

MNI BRIEF: NFC Fiscal Aid An EU Sovereign Balance Sheet Risk

MNI (Frankfurt)
(MNI) Frankfurt

ECB Bulletin highlights balance sheet risks to sovereigns from Covid support measures.

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National and EU-level fiscal interventions to support non-financial corporations have largely succeeded in insulating the sector from major disruptions, although significant explicit and implicit risks to government balance sheets have built up as a result, a study published in the latest European Central Bank Economic Bulletin concludes.

More targeted approaches will be needed as the pandemic evolves, economists Celestino Girón and Marta Rodríguez Vives argue, though a rush to privatise public corporations should be resisted, and action should be taken to prevent spillovers from non-performing loans undermining banks and reinforcing possible negative sovereign-financial loops.