Macroview

Chinese growth forecast remains intact

Chinese GDP for Q3 2017 came in at Rmb21.2 trillion (USD3.2 trillion), growing by 6.8% y-o-y in real terms, slightly below the pace of expansion in the first half of the year (6.9%). Several points are worth highlighting. First, China’s economic transition is well underway. The tertiary sector, mainly services, continues to be the main […]

ECB preview: slower, longer, stronger

Recent ECB communication has been remarkably consistent in signalling a ‘slower for longer’ QE extension into 2018. In light of these signals, we expect the ECB to announce at its 26 October meeting that asset purchases will be extended for nine months, until at least September 2018, at a reduced pace of EUR30bn per month, […]

The BoJ’s ETF purchases mark a major shift for Japanese equity market

Although it has made no major monetary policy announcement since September 2016, the Bank of Japan (BoJ) has actually been tapering its government bond purchases ever since. As a result, equity ETF purchases have steadily increased over the past year from 3% of total BoJ purchases to 9% recently, above the initial implicit target of […]

Suspense in Catalonia

This morning, the Catalan president failed to answer clearly whether Catalonia had declared independence or not. He reiterated that he had placed last week’s unilateral declaration of independence on hold in order to open up a “two-month process” to try to reach a deal with the central executive. Spanish Prime Minister Mariano Rajoy warned that […]

Euroscepticism is making less of a splash

A Catalan crisis, a Dutch eurosceptic-leaning government coalition, the return of Austrian populists, difficult German coalition talks… Eurosceptics have had plenty of opportunities to make a comeback, and yet the market continues to trade each event as largely idiosyncratic in nature. Explanations abound for the resilience of peripheral markets to political risks, including a stronger […]

Are French reforms for real?

The first major piece of President Emmanuel Macron’s agenda, the business-friendly labour market reform, was signed into law last month. Some Macron measures may have adverse effects in the short term and some others are not fully financed and difficult to quantify, but overall they should boost purchasing power, investment and productivity. The government has […]

China is gobbling up US crude oil exports

The ‘revolution’ in tight oil production means that US oil production is about to break the annual record of 9.6 million barrels per day (mb/d) reached in 1970. Under rising pressure from oil producers, the Obama administration significantly loosened rules on crude oil exports, which have boomed. But where is all this oil going? China […]

New Fed Chair—Change or Continuity?

The Trump White House has reportedly narrowed the list of candidates for the role of Fed Chair to five people, and a decision could be announced in the coming days. The initial market reaction could be guided by the perceived hawkishness of any nominee compared with Janet Yellen. John Taylor and Kevin Warsh are perhaps […]

House View, October 2017

Asset allocation Headline volatility on equity markets remains low, and given robust economic and earnings growth we are still constructive on equities, particularly the euro area and Japan. We are neutral on the US, selective on Swiss stocks, and underweight the UK. However, there are signs of pressure, notably in forex markets, and headline volatility […]

Underlying momentum in US employment remains intact

Nonfarm payrolls fell 33,000 in September, with data affected by hurricanes in the southern US. These aside, labour market signals – especially when looking at the household survey – remain solid. After a drop of 74,000 in August, employment rose 906,000 in the household survey, leading to a sharp fall in unemployment to 4.2%, the […]

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