The Swiss National Bank (SNB) published its 2017 annual result today. The SNB confirmed a profit of CHF54.4bn in 2017. This was more than double the 2016 figure (CHF24.5bn) and its biggest profit ever. Earnings from the SNB’s foreign currency positions amounted to CHF49.7bn, its gold holdings increased in value by CHF3.1bn and its Swiss […]
The ECB remains on a cautious exit path. At the 8 March meeting, we expect the ECB to drop its commitment to increase QE in terms of its size and/or duration, if needed – a change that is long overdue, in our view, against a very favourable economic background and given that constraints linked to […]
This week the German Bundesbank published its 2017 annual report, which includes a number of interesting figures that are relevant to the broader (monetary) policy debate in the euro area. In particular, the Bundesbank provided details of the amount of securities held on its balance sheet for policy purposes, including QE, at the end of […]
China’s official manufacturing Purchasing Manager Index (PMI) for February came in at 50.3, down from 51.3 in January and 51.6 in December 2017. The Markit PMI (also known as the Caixin PMI), however, edged up slightly to 51.6 in February from 51.5 in the previous month. Due to the floating date of the Lunar New […]
Switzerland lagged the US and the euro area in terms of annual GDP growth for the third consecutive year in 2017, but today’s data confirm that the Swiss economy is continuing its recovery. Economic prospects for this year look promising. We expect growth in the Swiss economy to accelerate from 1.0% in 2017 to 2.0% […]
Productivity is a crucial missing link in US growth. Q4-2017 productivity data was again disappointing: labour productivity was up just 1.1% year-on-year (y-o-y). It averaged only 1.3% in 2017 as a whole, while the five-year average is a lacklustre 0.8% (versus more than 3% in the early 2000s). Low productivity growth remains a front-and-centre worry […]
Fed Chair Jerome Powell highlighted continuity with Janet Yellen’s monetary policy in his testimony before Congress today. He highlighted “positive developments” since the December meeting. This could be a hint that an additional rate hike could be in the pipeline (The Fed indicated three rate hikes in the December dot plot). Reading between the lines, […]
According to Xinhua News Agency, the Central Committee of the Communist Party of China (CPC) has proposed a number of amendments to the Chinese constitution, pending ratification at the upcoming National People’s Congress. One important amendment proposed is removal of the term limits for the president and the vice-president of China, which paves the road […]
The ECB launched a second series of Targeted Long-Term Refinancing Operations (TLTRO-II) in March 2016 with the specific objective of boosting bank credit. Today’s M3 report, including bank credit flows for January 2018, will be used to calculate the interest rate applied on TLTRO-II loans, which amount to EUR740bn in aggregate. With the notable […]
According to the last polls published before the blackout period, no single party or coalition is projected to win an outright majority in the Italian general election next Sunday. Given cyclical growth, near-term economic risks seem to be contained, but Italy’s potential growth rate is low, and youth unemployment is among the highest in Europe. […]
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