The agreement reached at last week’s EU Summit is close to the smallest common denominator. It is true that Mrs Angela Merkel had very little room to manoeuvre in an electoral year, but the consequence is that the euro area integration is moving forward with only half measures and imperfect solutions. The risk is that the […]
Despite a softer contraction than anticipated in the manufacturing sector, today’s PMI data are still in negative territory. As a result, the entry point in the fourth quarter is very low. So today’s release tends to confirm our scenario of a sharper GDP contraction in Q4 than the -0.1% q-o-q recorded in Q3. The flash […]
The EU heads of state took a step toward banking union last week during the first day of the EU Summit. The decisions taken certainly do not represent a breakthrough, although they did help to ease investors’ nerves after concerns re-emerged recently. A summit held on 25 September between Germany, Netherlands and Finland seemed to […]
The October 2012 issue of Perspectives is now available for downloading. In this month’s strategy section, Pictet’s analysts explain that equities, gold and the euro featured as prime beneficiaries of announcements of a fresh wave of monetary easing measures. These have helped to diminish the liquidity risk premium, giving the value of such risk assets […]
Several hurdles were removed on 12 September 2012 The German Constitutional Courtruling cleared the way for the launch of the European Stability Mechanism (ESM). Dutch parliamentary elections did away with the risk of a eurosceptic government in a core country. The European Commission ambitious proposal for bank regulation provides a road map towards a banking […]
In this video Yves Bonzon, Pictet’s Chief Investment Officer, explains why hedging for currency risk might be more tricky than it looks in the context of a Euro breakup. Don’t forget that you can subscribe to our videos in iTunes.
Friday’s economic news from Germany confirm that the only remaining European engine of growth is running out of steam: June’s Ifo Business Climate Survey fell to 105.3 from 106.9 in May. This is the second decline in a row. The deterioration is essentially due to a fall in expectations (see chart below) as its component […]
Spain’s government has finally decided over the week-end to seek international assistance. The precise amount of the loan has yet to be determined but could be up to €100 billion. The following 6 points summarize how the Spanish government will accept EU assistance. 1. The Spanish government has finally decided to seek international aid to address […]
The ECB Governing Council decided yesterday to leave interest rates unchanged, as expected. Mario Draghi, President of the European Central Bank, leaked however to the press that a few members were in favour of a rate cut. His assessment of the economic situation was slightly more bearish than one month ago. The euro area appears […]
Our view – expressed in March – that the euro would gain ground against the US dollar was clearly wrong. On the back of a violent re-intensification of the euro area sovereign and banking crisis, the euro fell heavily against the greenback recently: -5.6% since the beginning of May to USD1.25 per EUR currently. What […]
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