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Global sentiment indicator supports growth scenario

Global sentiment improved slightly in November, to 52.1 from 52.0 in October, according to Markit’s global Purchasing Manager Index (PMI). This is the third monthly improvement in a row. One has to look back to August 2014 to find a higher level. Advanced economies are among the more upbeat. Business sentiment in November was highest […]

What next for Italy after referendum?

The Italian referendum on Senate reform was rejected on 4 December by a surprisingly wide margin (59% versus 41%) on high voter turnout. In the short run, the main risk is that rejection of the government-backed referendum will render a market-based recapitalisation of the Italian banking sector more difficult. Italian banks will remain under considerable […]

Healthy U.S. jobs report points to early rate hike

US non-farm payroll employment rose by a healthy 178,000 month-on-month (m-o-m) in November, in line with consensus expectations. Unexpectedly, the US unemployment rate fell further in November, to 4.6% from 4.9% in October, reaching its lowest level in more than nine years. At 4.6%, the US unemployment rate is now below the median rate of […]

Search for policy flexibility poses dilemma for ECB

The European Central Bank (ECB) faces a communication dilemma ahead of its 8 December meeting. Amid growing evidence of a more robust recovery and improved policy transmission, there is a case for a reduction in the pace of asset purchases at some point in 2017. However, signalling an eventual tapering of asset purchases now would […]

Arbitraging between equity investment strategies

The US Value equity strategy’s outperformance has accelerated since the US elections on November 8. Over the 15 trading days following the elections, our Value index returned 9.8% (in US dollars), compared with 8.2% during the preceding six months. Current economic and equity market dynamics reveal an opportunity to arbitrage between two distinct equity investment strategies: […]

U.S. growth to slow in H1 2017 before rising again in H2

US GDP growth was revised up from 2.9% to 3.2% for the third quarter. The main reason was a higher estimate of growth in consumer spending. Turning to Q4, economic data published so far have been mixed. Data on consumption in October were a bit disappointing. And advance estimates for the trade deficit and inventories […]

The Family Consilium 2016

This Chronicle presents the highlights from The Family Consilium held in Gstaad in June 2016. Topics covered include: emerging disruptions in geopolitics, disruptive forces in technology, how investors might respond to the changing financial environment, and strategies to manage the challenges of passing wealth from one generation to the next. Other highlights are Elif Shafak, […]

Long-term dollar appreciation reaching maturity

Our core scenario foresees risk appetite remaining robust as President Trump adopts a more moderate stance on protectionism than his past rhetoric would suggest. The USD should appreciate most against low-yielding currencies. But while we acknowledge that fundamental drivers also justify further USD strength, we believe that the long-term trend of USD appreciation is reaching […]

Credit impulse remains weak in euro area

Euro area bank credit flows to non-financial corporations rebounded strongly in October, by EUR11 bn in adjusted terms. Bank loans to households continued to expand at a healthy pace (+EUR10 bn). The slowdown in annual growth of the broad monetary aggregate M3, from 5.1% to 4.4% year on year in October, was largely due to […]

Signs of higher growth and inflation in the euro area

Flash purchasing managers’ indices (PMI) for November, compiled by Markit, delivered upside surprises across most countries and sectors in the euro area. Business confidence remained very strong in Germany, and improved markedly in France and peripheral countries. The euro area composite PMI rose to 54.1, pointing to real quarter-over-quarter (q-o-q) GDP growth of at least 0.4% […]

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