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.

Russian rouble: significantly undervalued but quite risky

On 6 April, the Trump Administration announced additional and more severe sanctions against Russia “in response to the totality of the Russian government's ongoing and increasingly brazen pattern of malign activity around the world”. US sanctions target seven Russian oligarchs, 12 companies controlled by them, and 17 high-ranking government officials. The measures freeze any US assets held by those targeted and cut them off from US finance, trade...

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Euro area core inflation to rise again after Easter

The ECB’s Governing Council may have to wait a little longer to get a clearer view of where euro area core inflation is heading in the near term. The early timing of Easter this year has made travel-related services prices more volatile. Another reason is that an unexpected drop in core goods inflation has fuelled concerns over a potentially larger FX pass-through.

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ECB policy: Stop Worrying and Love the Soft Patch

For all the talk about weaker economic momentum and low inflation in the euro area, we would not jump to conclusions in terms of ECB policy. True, downside risks have re-emerged over the past couple of months, generating understandable concerns and frustration in Frankfurt. However, the ECB is unlikely to respond unless those risks materialise, which is not our central case.

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Switzerland, still on the monitoring list

The U.S. Department of Treasury has just published its semi-annual report on International Economic and Exchange Rate Policies. It comes at a time when the US Administration remains deeply concerned by the significant trade imbalances in the global economy. The report only focuses on the US’s 12 largest trading partners, which collectively account for more than 70% of the US’s trade in goods.

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Swiss Producer and Import Price Index in March 2018: +2.0 percent YoY, +0.2 percent MoM

The Producer and Import Price Index fell in March 2018 by 0.2% compared with the previous month, reaching 102.3 points (December 2015 = 100). This decline was due in particular to lower prices for petroleum products and pharmaceutical preparations. Compared with March 2017, the price level of the whole range of domestic and imported products rose by 2.0%. These are some of the findings from the Federal Statistical Office (FSO).

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Hard data proves soft in the euro area

Signs of a certain loss of momentum may well fuel additional ECB dovishness in the near term, but is unlikely to compromise upcoming policy normalisation.Euro area industrial production (excluding construction) was weak in February (-0.8% m-o-m) and follows the recent release of other disappointing pieces of hard data such as retail sales, German factory orders and trade. Based on available ‘hard’ data, real GDP growth rate in the euro area is...

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The important role of official statistics in a world of fact, fiction and everything in between

Facts provide the foundation for political and social dialogue. But what happens when instead of facts, purposely spread untruths begin to dominate that dialogue? And what can be done about it, or better still, what can be done to stop it? Possible answers can be found at the conference entitled “Truth in numbers - the role of data in a world of fact, fiction and everything in between" that highlights the importance of official statistics for...

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Switzerland Unemployment in March 2018: Down to 2.9 percent from 3.2 percent, seasonally adjusted unchanged at 2.9 percent

Unemployment registered in March 2018 - According to surveys by the State Secretariat for Economic Affairs (SECO), at the end of March 2018 130'413 unemployed people were registered at the regional employment agencies (RAV), 13'517 less than in the previous month. The unemployment rate fell from 3.2% in February 2018 to 2.9% in the month under review. Compared to the same month of the previous year, unemployment fell by 21,867 persons (-14.4%).

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Europe has a lot to lose from trade wars

Any estimate of the economic costs of protectionist measures, let alone trade wars, is subject to uncertainty given the complexity of global supply chains. A common assumption is that new tariffs on exports will produce small direct effects on GDP growth but more significant indirect effects in the event of escalating trade conflicts, including on domestic investment.

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Swiss Consumer Price Index in March 2018: +0.8 percent YoY, +0.4 percent MoM

The consumer price index (CPI) rose by 0.4% in March 2018 compared with the previous month, reaching 101.5 points (December 2015=100). In comparison with the same month of the previous year, inflation stood at 0.8%. These figures were compiled by the Federal Statistical Office (FSO).

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UBS publishes agenda for the Annual General Meeting of UBS Group AG on 3 May 2018

The Board of Directors of UBS Group AG is proposing Jeremy Anderson and Fred Hu for election as new members of the Board of Directors for a one-year term. Jeremy Anderson (born 1958) was Chairman of Global Financial Services at KPMG International from 2010 until November 2017. He previously held various senior positions at KPMG and was appointed to lead KPMG’s UK Financial Services Practice in 2004.

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Swiss Retail Sales, February: Stable Nominal and +0.6 Percent Real

Real turnover in the retail sector also adjusted for sales days and holidays fell by 0.2% in February 2018 compared with the previous year. Real growth takes inflation into consideration. Compared with the previous month, real, seasonally adjusted retail trade turnover registered an increase of 0.3%.

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Eurozone Faces Many Threats Including Trade Wars and “Eurozone Time-Bomb” In Italy

Eurozone threatened by trade wars, Italy and major political and economic instability. Trade war holds a clear and present danger to stability and economic prospects. Italy represents major source of potential disruption for the currency union. Financial markets fail to reflect the “eurozone time-bomb” in Italy. Financial volatility concerns in Brussels & warning of ‘sharp correction’ on horizon.

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Larger-than-expected reduction in French public deficit

France’s public deficit fell to 2.6% of GDP in 2017 according to INSEE’s preliminary assessment, down from 3.4% in 2016 and below the 3% threshold for the first time since 2007. The outcome was better than the government’s estimate of a 2.9% deficit. If confirmed, France will exit the Excessive Deficit Procedure that the European Commission opened in 2009.

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Impact of recent tariffs on US and China’s GDP should be limited for now

The Trump Administration last week announced tariffs of 25% on USD 60bn worth of imports from China (out of USD506bn of total Chinese merchandise imports). The list of products targeted, still has to be thrashed out. The official aim is to sanction China for alleged theft of US firms’ intellectual property; the US Trade Representative (USTR) estimates the damage amounts to USD 50bn.

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KOF Economic Barometer is Falling

In March 2018, the KOF Economic Barometer fell by 2.4 points to a new reading of 106.0. Notwithstanding this decline, the present position is still on a level clearly above its long-term average. This indicates that in the near future the Swiss economy should continue to grow at rates above average.

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British pound – Smoother transition, stronger sterling

Recent positive developments in the United Kingdom (UK), namely the transitional deal reached between the UK and the European Union (EU) on 20 March and the strong job market report on 21 March, call for a more positive short-term outlook for the sterling than previously thought. We therefore revise our projections upward for the sterling on the entire time horizon.

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London House Prices Falling Sharply – UK’s Much Needed Wake-Up Call

London house prices falling at fastest pace since 2009. Values fell by 2.6% in year through January. London house prices likely to be weakest in UK over next five years. Inflated prices make London property more exposed to economic and political shocks. Worries over house prices are having a knock-on effect in wider economy. Physical gold to act as much needed hedge against falling property prices.

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