Volatility presents opportunities

The technical correction in markets corrects the anomaly of a long drawn-out calm. The upsurge in volatility contains opportunities as well as threats.
Perspectives, Special Edition 2018

After an exceptional year…

Europe’s renaissance

Senior Economist Frederik Ducrozet discusses the 2018 outlook for the euro area, including the potential risks for long-term investors.

Multi-Generational Wealth, Singapore

The fourth edition of the Asian Family Office Master Class took place in Singapore in November 2017, with about 70 guests attending.

Back to normal in markets in 2018

CIO Cesar Perez Ruiz on where to find investment opportunities in 2018

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Less scope for yen and Swiss franc depreciation

The start of the year has seen the Japanese yen and Swiss franc appreciate strongly against the US dollar (they rose by 5.6% and 4.4% respectively between 1 January and 22 February) despite higher US yields. However, this rise in US yields came with heightened market volatility, favouring safe haven currencies such as the yen […]

Europe chart of the week – Business surveys

There was a broad-based setback in euro area business surveys in February, whether in terms of country or of sector. The Flash composite PMI slipped to 57.5 in February from 58.8 in January. The month-to-month dip was the biggest since 2014. National business surveys painted a similar picture. In Germany, the Ifo business climate index […]

Latest US tax bill could alter trade statistics

The US tax bill, enacted last December, could lead to dramatic changes in US international trade statistics – and particularly a lower trade balance, although it is not exactly certain to what extent. Indeed, alongside the tax bill’s headline cut of the statutory corporate tax rate from 35% to 21%, it contains some important reforms […]

Euro area: Flash PMI surveys pass their peak

Flash PMI indices eased in February, but remain consistent with continuing solid growth in the euro area. The flash composite purchasing managers’ index (PMI) for the euro area fell to 57.5 in February from 58.8 in January, below consensus expectations. Activity in both services and manufacturing cooled in February. While the average composite PMI is […]

Frankfurt, we have a gender problem

The Eurogroup has designated Spanish finance minister Luis de Guindos as candidate for the position of Vice President of the European Central Bank to succeed Vítor Constâncio in June 2018, for a non-renewable eight-year term. This nomination has increased expectations that Bundesbank President Jens Weidmann will become the next ECB President after Mario Draghi’s term […]

US federal budget update—free hugs

Washington DC is in fiscal easing mode. Having voted for bold tax cuts in December, Congress is now increasing the theoretical spending limits for this year and next, by USD 300bn. This comes even though budget data for the past two years have been disappointing notwithstanding a solid labour market. From a growth perspective, we […]

Europe chart of the week – French unemployment

France registered the largest drop in unemployment in about ten years in Q4 2017. In metropolitan France, the number of unemployed fell by 205,000 to 2.5 million people, pushing the ILO unemployment rate down to 8.6% of the labour force (-0.7pp), its lowest level since Q1 2009. The improvement was broad based across age groups […]

US CPI update: Costlier T-shirts

January core CPI inflation was firm, as the index rose 0.35% month-on-month (m-o-m). The year-on-year print was unchanged at 1.8%. Was inflation that bad? Probably not. The sharp increase in apparel prices (1.7% m-o-m, the biggest monthly increase since February 1990) appears particularly suspicious and may fall back again next month. Some notoriously volatile sub-indices, […]

US chart of the week – Tax base

A worry persists about many US states and municipalities’ finances, especially due to rising pension costs. The recent volatility in financial markets has raised fears the situation might worsen. The need to add to the pension pot is also affecting states and municipalities’ ability to fund infrastructure investment, or even basic maintenance. A shrinking tax […]

Switzerland: inflation edged lower in January

Headline consumer price index (CPI) inflation eased to 0.7% y-o-y in January from 0.8% y-o-y in December, in line with consensus and our own expectations. Core inflation fell from 0.7% y-o-y in December to 0.5% y-o-y in January. Our inflation outlook remains unchanged. We expect headline inflation to firm up gradually as 2018 progresses, averaging […]

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