Category Archive: 2) Swiss and European Macro

Main Author George Dorgan
George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on SeekingAlpha.com and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.

Swiss Producer and Import Price Index in November 2018: +1.4 percent YoY, -0.3 percent MoM

The Producer and Import Price Index fell in November 2018 by 0.3% compared with the previous month, reaching 103.1 points (December 2015 = 100). This decline is due in particular to lower prices for pharmaceutical products. Compared with November 2017, the price level of the whole range of domestic and imported products rose by 1.4%.

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EU Recession Imminent – Euro Disunion as Brexit, Italy and End of QE Loom

Someone asked recently how many times I had “crossed the pond” to Europe. I really don’t know. Certainly dozens of times. It’s been several times a year for as long as I remember. That makes me an extremely unusual American. Most of us never visit Europe, except maybe for a rare dream vacation. And that’s okay because our own country is wonderful and has a lifetime of sights to see.

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‘Paris’ Technocrats Face Another Drop

How quickly things change. Only a few days ago, a fuel tax in France was blamed for widespread rioting. Today, Emmanuel Macron’s government under siege threatens to break its fiscal budget. Having given up on gasoline and diesel, the French government now promises wage increases and tax cuts.

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ECB Preview: an end to net asset purchases

With the ECB’s asset purchases due to end this month and forward guidance set to remain unchanged, a focus at next week’s policy meeting will be staff forecasts for growth and inflation. At its Governing Council meeting next week, we expect the European Central Bank (ECB) to confirm that its asset purchases will cease at year’s end.

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Yellow vest protests cast cloud over Macron’s reform plans

Recent protests could have a negative impact on French growth, tax revenue and president Macron’s reform plans for his country and for Europe. French protests began on November 17 over hikes in fuel taxes, but have progressively broadened out into an expression of general anger with the French government about the cost of living and high taxes.

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Swiss Consumer Price Index in November 2018: +0.9 percent YoY, -0.3 percent MoM

The consumer price index (CPI) fell by 0.3% in November 2018 compared with the previous month, reaching 101.8 points (December 2015 = 100). Inflation was 0.9% compared with the same month of the previous year. These are the results of the Federal Statistical Office (FSO).

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Growth Contraction puts pressure on Italian Government

The downward revision to 3Q GDP will make the Italian government’s targets more difficult to achieve and complicate the budget debate with Europe. The Italian statistical office’s (ISTAT) final reading showed that the economy shrank 0.1% q-o-q (-0.5% q-o-q annualised) in Q3, whereas a preliminary reading on October 30 showed that growth was flat.

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Swiss Retail Sales, October 2018: +1.2 percent Nominal and +0.8 percent Real

Turnover in the retail sector rose by 1.2% in nominal terms in October 2018 compared with the previous year. Seasonally adjusted, nominal turnover rose by 1.9% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO).

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Surprise contraction in Swiss Q3 GDP

Switzerland’s growth unexpectedly contracted in the third quarter, pushing down our GDP growth forecast for 2018. Recent softening in the euro area also casts doubts about the pace of monetary tightening by the SNB.The strong growth enjoyed by the Swiss economy since Q1 2017 came suddenly to an end in Q3 18, when real GDP shrank unexpectedly by 0.2% q-o-q (-0.9% q-o-q annualised).

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Switzerland GDP Q3 2018: -0.2 percent QoQ, +2.4 percent YoY

Switzerland's GDP fell by 0.2% in the 3rd quarter of 2018 due to both the industrial and service sectors. On the expenditure side, domestic demand and foreign trade had a negative impact. Switzerland’s GDP fell by 0.2% in the 3rd quarter of 2018, after climbing by 0.7% in the previous quarter.

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Employment Barometer in the Q3 2018: Solid Employment Growth

In the 3rd quarter 2018, total employment (number of jobs) rose by 1.6% in comparison with the same quarter a year earlier (+0.1% with previous quarter; seasonally adjusted figures). In full-time equivalents, employment in the same period rose by 1.8%. The Swiss economy counted 13 500 more vacancies than in the corresponding quarter of the previous year (+23%) and the employment outlook indicator continues to indicate an upward trend (+1.0%). These...

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Italy and the EU: a debt-based excessive deficit procedure

European Commission deems Italy's budget noncompliant with EU rules.This week, the European Commission issued its opinion on Italy’s budget plans. Deeming them noncompliant with the EU’s budgetary rules, it recommended that an Excessive Deficit Procedure (EDP) be opened.Of the options available to the EU, a debt-based EDP would be the most difficult for Italy to deal with, as it would last longer and require Italy to ensure its debt stock...

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Construction Industry Production, Orders and Turnover Statistics: lncrease in construction production in Switzerland in 3rd quarter 2018

Secondary sector production rose by 1.1% in 3rd quarter 2018 in comparison with the same quarter a year earlier. Turnover rose by 3.1%. In comparison with the previous year industrial production grew in July by 3.3%, in August by 1.7%, then fell in September (-0.4%). For the whole of the 3rd quarter 2018 production increased by 1.4% in comparison with the same quarter a year earlier.

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Swiss Trade Balance October 2018: Record exports in October 2018

In October 2018, seasonally adjusted exports grew 6.0%, after their slightly negative evolution since June. They thus reach a level monthly record. Conversely, the decline in imports continued (-1.8%). The balance commercial loop with a surplus of 2.6 billion francs.

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China hard data for October reveals mixed picture

Disappointing consumption numbers point to growth deceleration in early 2019, but government measures beginning to be felt.Hard data out of China for October was mixed. On the positive side, growth in infrastructure picked up, suggesting the government’s fiscal policy easing is taking effect in the real economy. Industrial production numbers stopped declining, and the mining sector has a particularly strong performance.

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After May’s divorce deal: the road ahead for Brexit

But significant political challenges lie ahead before the 29 March deadline for Brexit. Sterling likely to be in the spotlight for several months.Theresa May’s cabinet has approved her divorce deal with the European Union (EU). A few cabinet secretaries have resigned, including Brexit Secretary Dominic Raab because the deal keeps the UK in a transitory ‘customs union’ with the EU, which in his view continues to give the EU too much influence on UK...

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Swiss wage index 2018: Real and minimum wages increased by 0.9 percent and 0.5 percent respectively in 2018

The social partners signatory to Switzerland's main collective labour agreements (CLA) agreed a nominal rise in real wages of 0.9% and a nominal rise in minimum wages of 0.5% for 2018. Real wages increased by 0.3% at collective level and by 0.6% at individual level.

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Swiss Labour Force Survey in 3nd quarter 2018: 1.2percent increase in number of employed persons; unemployment rate based on ILO definition falls to 4.4percent

The number of employed persons in Switzerland rose by 1.2% between the 3rd quarter 2017 and the 3rd quarter 2018. During the same period, the unemployment rate as defined by the International Labour Organisation (ILO) declined by 0.6 percentage points to 4.4%. The EU's unemployment rate decreased from 7.3% to 6.5%.

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Italian government sticks to its 2019 deficit plan

The minor concessions continued in the revised plan presented to the European Commission are unlikely to dissuade Brussels from launching sanctions.In a letter to the European Commission on 13 November, the Italian government confirmed that it would aim for a budget deficit at 2.4% of GDP in 2019 and reasserted its real growth forecast of 1.5% for next year.

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Swiss Producer and Import Price Index in October 2018: +2.3 percent YoY, +0.2 percent MoM

The Producer and Import Price Index increased in October 2018 by 0.2% compared with the previous month, reaching 103.4 points (December 2015 = 100). The rise is due in particular to higher prices for petroleum products, petroleum and natural gas. Compared with October 2017, the price level of the whole range of domestic and imported products rose by 2.3%.

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