Team Asset Allocation and Macro Research

Team Asset Allocation and Macro Research

“Since 1805 Pictet has remained single-minded in its mission to advise private clients, families and institutions in the art of managing their wealth.” More than 200 years after it was founded, Pictet ranks as one of Switzerland’s leading private banks and is among the most respected asset management specialists in Continental Europe. Even though we now have a worldwide presence and a global perspective, we retain the characteristics that have helped our clients to prosper over two centuries. Do not hesitate to contact Pictet for an investment proposal. Please contact Zurich Office, the Geneva Office or one of 26 other offices world-wide.

Articles by Team Asset Allocation and Macro Research

MMT, la nouvelle théorie en vogue à Washington

Bank Reserves (at Fed) 1995-2019

L’influence du ‘Modern Monetary Theory’ est susceptible d’augmenter dans les milieux économiques et politiques américains.La nouvelle théorie monétaire (Modern Monetary Theory/MMT), théorie macroéconomique défendue par des économistes hétérodoxes, commence à faire son chemin aux Etats-Unis.

Read More »

A spanner in the works

MSCI China vs. Developed Market Equities - Relative Price Change, 2017-2019

While Trump’s weekend tweets have created fresh uncertainties around US trade talks with China, some perspective is needed.At the weekend, US President Trump threatened to increase the tariff rate on Chinese imports as he believes that US-China trade negotiations are going “too slowly”. Importantly, Trump’s threats do not mean bilateral talks are breaking down. Indeed, the Chinese government confirmed today that its trade delegation would still go to Washington DC this week for another round of talks.

Read More »

Brexit update: UK parliament opts for an extension

GBP/USD Exchange Rate 2018-2019

After an eventful week in parliament, the Brexit ball is set to keep rolling as MPs move to extend the 29 March deadline.The British Parliament concluded a series of votes on Brexit this week with an intention to extend the 29 March Brexit deadline. What remains unclear at this point is whether the UK will seek a short (two months) or a longer extension (two years).

Read More »

ECB: to LTRO, or not LTRO, what is the question?

Stylised policy options for new (T)LTRO

The ECB’s decision on (T)LTRO will matter most to the euro area periphery banks who have been the biggest consumers of current TLTROs. Considering the weakness in most economic indicators the ECB should maintain an adequate degree of monetary accommodation.

Read More »

Contrasting Fortunes within the Euro Area

Euro Area Average Growth

The four biggest euro area economies slowed in H1 2018 due to a number of factors, including weak exports. We expect a rebound in H2—except in Italy, where political uncertainty has been denting business confidence. Forward indicators show that Italy is the only of the four major euro area economies to face weaknesses both in export-led manufacturing and services, due domestic political uncertainties (including the upcoming state budget) as well as global trade tensions.

Read More »

Eurosceptic Italian government faces a reality check

With the putative M5S-League government publishing its final common programme, we take a look at the road ahead for the Italian economy and for Italian government debt.We expect negative noise surrounding the Italian budget to intensify initially, but believe that negotiations with Brussels will result in compromises eventually, including dilution of the incoming Italian government’s fiscal easing measures. The biggest risks lie with the proposed rolling-back of the pension reforms, in our view.Italian spreads are likely to remain under widening pressure in the near term.

Read More »

Policy normalisation may be delayed in Europe

Taking stock of recent dovish shifts in European central banks’ communication and reaffirming our broadly constructive macro outlook.The European Central Bank (ECB) does not seem overly concerned about the soft patch in the economy in Q1 and appears willing to collect more data before they start discussing the timing and modalities of the next policy steps. We expect the ECB to hint at an imminent end to asset purchases at its June meeting, but to wait until July to announce the modalities of tapering.

Read More »

Strong growth and Abenomics mean Japanese equities continue to provide opportunities

Japanese growth momentum is at its strongest in over a decade, with the quarterly Tankan survey of business conditions and sentiment strengthening to an 11 – year high in Q4 2017. The economy may have expanded by 1.8% in 2017, up from 0.9% in the previous year. In 2018, the growth rate may moderate slightly to 1.3%, but should remain well above Japan’s potential growth, which currently stands at 0.85%, according to the Bank of Japan (BoJ, see chart1).

Read More »

Global macro: 10 surprises for 2018

Having laid down our expectations for the World economy in 2018, in this note we describe a number of potential surprises to the outlook. The usual suspects, or ‘known unknowns’, include a larger-than-expected fiscal boost from US tax cuts, (geo-)political risks, economic policy mistakes, inflation surprises, a financial bubble burst, or a Minsky moment in China, to name a few.

Read More »