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Switzerland: the SNB introduces negative interest rates

Following renewed upward pressure on the Swiss franc, the Swiss National Bank (SNB) decided to introduce negative interest rates on sight deposits. Although this should help to ease pressure on the franc, the main weapon to defend the floor remains FX interventions. Nevertheless, we continue to believe that the SNB will succeed in ensuring that the […]

US Federal Reserve: a first hike by mid-2015 remains the most likely scenario

The Fed was able to phase out the “considerable time” phrase, while also giving a rather neutral signal. Nevertheless, there was actually not much change in the guidance for the timing of the first rate hike. We continue to expect this first move to take place by mid-2015. A carefully managed change in guidance The […]

United States: ISM indices quite strong once again in November

The ISM manufacturing index eased slightly m-o-m in November, while its non-manufacturing counterpart bounced back sharply. Together they continue to point to strong economic growth. We remain quite optimistic on the US economy. The ISM manufacturing survey for November was published last Monday. The headline reading remained surprisingly high. Admittedly, it eased back from 59.0 in […]

US employment report: strong job creation bullish for economic growth

In November, job creation was at its highest since January 2012, while the unemployment rate remained stable and m-o-m increases in wages picked up. This further endorses our bullish view on the US economy. However, we do not believe that it will alter significantly the FOMC’s analysis of the economic situation. Non-farm payroll employment rose […]

United States: growth in consumption only moderate so far in the fourth quarter

Although the Q3 consumption growth rate was revised up, October’s data were disappointing. However, on the back of the positive impact on real income from the sharp fall in gasoline prices, we continue to expect that growth in consumer spending will prove quite robust overall in Q4. Consumer spending data disappointing in October Real personal […]

Switzerland: the gold initiative, the Swiss franc and the SNB

Uncertainty surrounding the upcoming vote on the Swiss gold initiative is putting upward pressure on the franc. The initiative is likely to be rejected. However, even if it is approved, we believe the Swiss National Bank (SNB) would succeed at doing “whatever it takes” for the 1.20 floor to hold, even if it means making […]

United States: Core retail sales enter Q4 on a strong note

Today’s US retail sales report was encouraging. With these data in hand, solid expansion in employment and a sharp fall in gasoline prices, we believe consumption growth may well approach 3% in Q4. And it is likely to remain solid next year. Nominal retail sales rose by 0.3% m-o-m in October, slightly above consensus expectations […]

United States: full employment in sight?

In October, job creation was robust, while the unemployment rate fell further. At the current pace of decline, the unemployment rate will reach the Fed’s estimates of full employment by Q1 2015. However, we don’t believe this will alter the FOMC analysis of the economic situation. Non-farm payroll employment rose by 214,000 m-o-m in October, […]

US GDP growth above expectations in Q3

Q3 GDP growth came in above expectations and prospects appear upbeat for Q4. Our forecasts for GDP growth in 2015 (3.0%) and monetary policy (first hike by mid-year) remain unchanged. In Q3 2014, US real GDP grew by a solid 3.5% q-o-q annualised, above consensus estimates (3.0%). This followed an even stronger growth rate of […]

United States: falling gasoline prices should boost consumer spending

Today’s retail sales report was weaker than expected. Apparently, consumption ended Q3 on a soft note. However, following the recent sharp fall in gasoline prices and its impact on real personal income, we believe growth in consumer spending will prove quite robust over the coming months. Nominal retail sales dropped by 0.3% m-o-m in September, […]

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