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Oil prices: limited upside potential

The market was highly optimistic about the oil price at the beginning of this year, with oil analysts expecting that prices would have recovered to USD60-65 by now. These hopes have clearly been dashed, as WTI prices have fluctuated in a range of USD45-55 since January 1. We have been much less optimistic than the […]

Chinese growth momentum moderates

  Economic indicators for April point to some softening in growth momentum in China. Hard data confirm the moderation seen in manufacturing and non-manufacturing PMIs released earlier this month, and the direction of change is consistent with our expectation that Q1 marked the peak of growth momentum in China for 2017. In our view, the […]

US Treasuries cast doubt on Trumponomics

At the beginning of 2017, in our outlook for sovereign bonds, we forecasted that the 10-year US Treasury yield would rise to 2.8-3% by year’s end. However, yields have been stuck in a range of 2.2-2.6%, so a review looks warranted. Indeed, the risk has increased of an alternative to the core scenario, but we […]

U.S. consumer spending showing signs of rebound

  Core retail sales in the US rose by 0.2% m-o-m in April, below consensus expectations (+0.4%). However, retail sales for March were revised up by 0.2%. The result was that between Q1 and April, nominal core retail sales grew by a healthy 3.6% annualised, following an increase of 3.5% q-o-q in Q1 and 3.1% […]

Monthly Investment Strategy Highlights, May 2017

 Asset Allocation Markets are starting to revise their expectations for the Trump administration. We still see some prospect of a US fiscal stimulus, but it is likely to be later (not kicking in before 2018) and less ambitious than hoped. Improving economic performance and strong earnings growth support our positive stance on DM equities, despite […]

US unemployment falls to fresh cyclical low

  Non-farm payroll employment rose by a solid 211,000 in April, above consensus expectations. Unexpectedly, the US unemployment rate continued to fall from 4.5% in March to 4.4% in April, and is now significantly below the Fed’s median estimate for full employment (4.8%). However, wage data were somewhat disappointing, with the pace of hourly wage […]

Euro area growth on track to reach at least 1.5% in 2017

According to Eurostat’s preliminary flash estimate released today, euro area real GDP expanded by 0.5% q-o-q in Q1 2017 (+0.455% q-o-q; 1.8% q-o-q annualised; 1.7% y-o-y), slightly above consensus expectations (0.4%). This flash estimate confirms that most business confidence surveys overestimated growth at the beginning of the year, with the ‘true pace’ of economic expansion […]

US economic prospects look good

US GDP growth decelerated from 2.8% in H2 2016 to 0.7% quarter on quarter (q-o-q) annualised in Q1, slightly below consensus expectations (1.0%). However, this weak reading is mainly due to statistical anomalies (growth tends to be lower in Q1) and transitory factors that weighed on consumer spending and stockbuilding. However, fixed investment growth picked […]

The Pictet Group Annual Review 31 December 2016

We are pleased to introduce the Annual Review of the  Pictet Group for 2016 — my first as Senior Partner. After I assumed the role on 1 July last year, I was asked if Pictet’s strategic direction would change. The Senior Partner is, by tradition, chair and primus inter pares of  the board of partners, […]

Distorted rebound in core euro area inflation

The big story from today’s set of economic data releases was the sharp rebound of euro area core HICP inflation, from 0.7% to 1.2% in April. While the ECB should welcome the news, our analysis points to large statistical distortions which will likely be reversed in the months ahead. We expect euro area core HICP […]

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