How Italy and Spain are showing some musclePeter Garnry
If you want evidence the Eurozone is recovering, take a look at the loan rates for small and medium sized enterprises in Spain and Italy; they're at their lowest levels in two years. Saxo Bank's Head of Equity Research, Peter Garnry, says this is a positive and healthy sign.
Peter says that ever since last year, when the ECB's Mario Draghi said he'd do whatever it takes to save the euro, credit spreads contracted in the government bond markets and that's now filtering in to loans for small and mid sized companies.
Businesses are still paying on average 200 basis points less in Germany than in Italy and Spain but he believes that spread will soon narrow. He also thinks that peripheral equity markets should continue to perform well and could outpace core European countries such as Germany and Holland.