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US job market remains strong, but wage growth still disappoints

All in all, today’s employment report was healthy. In the end, job creation was actually quite robust overall in Q2, ‘aggregate weekly payrolls’ rose strongly q-o-q, and if unemployment rebounded a little in June, it was only because of higher participation, not a lack of employment growth. However, once again, wage data brought some disappointment, […]

Upbeat PMIs in China point to solid growth momentum in Q2

China’s official manufacturing PMI rose to 51.7 in June, the second highest reading in 2017. The Markit manufacturing PMI also rebounded to 50.4 in June after having dropped below the 50 threshold in the previous month. The rise in both indices in June suggests that China’s growth momentum in the second quarter was likely still […]

U.S. consumer spending picks up, but inflation is still soft

Real consumer spending increased by just 0.1% month-on-month in May. However, Q1 and April consumption figures were revised higher. The overall result was that between Q1 and April-May, US personal consumption grew by a strong 3.2% annualised. The strong bounce back in consumption growth expected has been confirmed, so that our forecast of 2.7% growth […]

Rebound in euro area core inflation

Euro area ‘flash’ HICP inflation eased to 1.3% y-o-y in June (down from 1.4% in May) while core inflation increased to 1.1% (up from 0.9% in May). Both figures were slightly above consensus expectations, but our overall assessment is unchanged. The bottom line from the June inflation report is that the broad picture remains unchanged […]

Risks for high-yield bonds are rising

US and euro high yield have performed strongly between Donald Trump’s election as US president and the end of June. However, our analysis of fair value suggests there is potential for a widening of spreads and a rise in default rates ahead. Our multi-factor model of high-yield corporate spreads enables us to forecast US and euro […]

The dollar should rebound in the coming months

The euro appreciated significantly against the US dollar (by as much as 1.4% at one stage) on 27 June, reaching a 10-month high. The main reaon was a speech by ECB President Mario Draghi at the ECB forum on central banking at Sintra. To a lesser extent, the ongoing struggle to find legislative consensus among […]

EA: Bank credit flows rose again in May

Euro area credit flows to non-financial corporations increased again in May, by EUR10 bn in adjusted terms, following a gain of EUR11 bn in April. Broad money growth (M3) rose marginally from 4.9% to 5.0% y-o-y. Bank lending growth to the private sector was broadly unchanged at 2.6% y-o-y, in line with leading indicators. Overall, […]

Chinese infrastructure companies will benefit from sustained high investment

A high level of investment in infrastructure in China is set to continue into the medium term. Under the latest Five Year Plan (FYP), for 2016-20, the transportation sector is to see CNY15 trillion (USD2.2trn) of capital expenditure, much of which will go into roads and railways. Another major domestic project, the Xiongan New Area, […]

Euro PMIs show business activity remains solid

PMI indices showed some signs of moderation in June. The composite PMI decreased from 56.8 in May to 55.7 in June, below consensus expectations (56.6). The PMI’s forward-looking components remained pretty strong in June, with some bright spots in new orders and employment. On average, composite PMI in Q2 was the highest in six years […]

Security in a digital world

We live in a digital world where security threats are proliferating and becoming more sophisticated. The Summer 2017 issue of Pictet Report, examines the nature of these threats and various aspects of online security. On a personal level, people find hackers trying to access their personal information online for criminal purposes. Commercial organisations and public […]

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