Gold: Safe haven needs intensified by SNB’s decision to weaken the CHF

Year-to-date, the price of gold has risen by 29% in US dollars. Measured in euros, the metal has risen by 26.2%, while in Swiss francs, the price is up by 21%. In comparison, commodity prices, as measured by the GSCI spot commodity index, have decreased by 3.6% over the same period. Performance of selected asset […]

The SNB sets a maximum value for the franc

This morning, the Swiss National Bank (SNB) set a minimum exchange rate at CHF 1.20 per euro, the latest measure to prevent the strengthening of the Swiss currency. It should be noted that the SNB is not pegging the franc to the euro; it is merely setting a threshold the Swiss franc should not exceed. […]

Euro survival threatened by the economic downturn

The second release of the PMI survey for August confirmed the sharp deterioration in economic sentiment. In particular, manufacturing sentiment led the movement with a fall into contraction territory in August (49.0). PMI services resisted, edging only slightly lower from 51.6 to 51.5. Nevertheless, the overall index fell to 50.7 from 51.2 in July. While […]

United States: weak employment report in August

Non-farm payroll employment was unchanged m-o-m in August, below consensus expectations of an increase of 68,000. Moreover, July was revised down (from +117,000 to +85,000) as were the numbers for June (from 46,000 to 20,000). Net revisions thus cumulated to a negative 58,000.   The unemployment rate remained unchanged at 9.1% in August, in line […]

Switzerland: GDP growth

GDP growth for the second quarter of 2011 was published this morning, in line with expectations, at +0.4% q-o-q (+1.4% annualised). On a year-on-year basis, GDP growth edged down from 2.6% in Q1 to 2.3% in Q2. With the Swiss franc so strong, a slowdown in Swiss economic expansion was widely expected in Q2. However, […]

United States: house prices

The S&P Case-Shiller index fell by 0.1% m-o-m in June, but was up marginally (+0.1%) q-o-q in Q2, following a significant fall in Q1 (-1.3%). This slight improvement shouldn’t be interpreted too positively. The renewed sharp weakness in house prices earlier this year was probably partly linked to particularly inclement weather in January and February […]

United States: NIPA corporate profits

According to the corporate profits statistics published by the National Accounts (NIPA), US corporate profits rose further in Q2, reaching 12.9% as a percentage of GDP, their highest proportion since 1950. Corporate profits rose by $57.3bn q-o-q in Q2 11 (+12.8% annualised). Due to the disappearance of a favourable base effect, corporate profits were up […]

Europe caught in its own net

The eurozone debt crisis is intensifying. It has been expanding to an ever higher number of countries: recently France has witnessed a first salvo of attacks from the markets. It is worsening in distressed countries. Wanting to solve the indebtedness problem through virtuous management of public finances, without massive intervention by the ECB, implies reducing […]

Another episode of the doctor breaking the thermometer

There are a few reasons up in the air as to why risk assets sold of so hard yesterday, such as the ECB having had to lend USD to a EU bank but I think this is more a symptom of the crisis than a cause. My colleagues at Pictet Asset Management (PAM) posted in […]

Gold continues to fulfil its insurance role

Gold is experiencing unprecedented success, but the high price casts doubt over further price gains. The sovereign crisis continues to rock financial markets and threaten the global economy. Many assets are looking cheap on various valuation measures. Higher yielding assets and attractive buying opportunities might divert investment away from gold. Though gold is very expensive […]

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