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United States: The Fed launches “Operation Twist”

As widely expected, the FOMC announced that it will sell short-term securities held in its portfolio to purchase longer-term securities. This action contributed to lower long-term rates. However, it is likely to support economic growth only very modestly. With GDP growth likely to continue to prove lacklustre, more monetary easing measures are likely, but probably […]

United States: Net new credit positive for the third quarter in a row in Q2 2011

Encouragingly, overall credit to the nonfinancial private sector increased further in the second quarter ($351bn annualised) for the third quarter in a row (see chart). Moreover, the pace of lending was substantially higher than in Q1 (36bn). Net new credit to non-financial private sector: in USD bn, annualised However, while net new lending to the […]

United States: Manufacturing output has grown robustly so far in Q3

Manufacturing output grew by a solid 4.2% annualised between the Q2 and July-August, confirming the idea that output growth will show a noticeable improvement in Q3. Industrial production rose by 0.2% m-o-m in August, above consensus estimates (+0.0%). July’s reading was not revised (+0.9%) but June’s number was revised down from +0.4% to +0.1%. Industrial […]

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, […]

Protection and opportunity in alternative investments

This issue of the Pictet Report is based on our conference on Alternatives held in Zurich in late September. As in 2009 and 2010 we have brought together some of the leading experts and practitioners from the hedge fund and private equity industries. Their two days of debate took place against a backdrop of unprecedented […]

Deflation threatening once again

For some time now, we have been predicting a gold price of USD2,000 an ounce by the middle of this decade. Upheavals in financial markets this summer have already pushed the bullion price up towards that level: on 23 August gold hit a new all-time high of USD1,913. Should we now presume its bull run […]

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