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 Trade Balance May 2020: signs of recovery in foreign trade

After its historic setback of the previous month, foreign trade recovered a few colors in May 2020. Imports posted a seasonally adjusted increase of 9.8% to 13.6 billion francs; however, they are still below their March 2020 level. Although exports fell again (-1.2%), they eased compared to April. The trade balance closed with a surplus of 2.8 billion francs.

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Supplementary accommodation: 0.7 percent increase in overnight stays in 2019, but decrease in demand for holiday homes

15.06.2020 - In 2019, supplementary accommodation posted a total of 16.7 million overnight stays, i.e. an increase of 0.7% compared with 2018. With 11.4 million units, Swiss visitors represented more than two-thirds of demand (68.6%), i.e. a rise of 2.4%. Foreign visitors registered a 2.8% decrease with 5.2 million units. With 4.4 million overnight stays (-3.8%), European visitors accounted for the majority of stays by foreign guests.

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Swiss Producer and Import Price Index in May 2020: -4.5 percent YoY, -0.5 percent MoM

15.06.2020 - The Producer and Import Price Index fell in May 2020 by 0.5% compared with the previous month, reaching 97.6 points (December 2015 = 100). This decline is due in particular to lower prices for pharmaceutical and chemical products as well as for petroleum products. Compared with May 2019, the price level of the whole range of domestic and imported products fell by 4.5%.

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Switzerland Unemployment in May 2020: rose to 3.4percent, seasonally adjusted rose to 3.4percent

Registered unemployment in May 2020 - According to surveys by the State Secretariat for Economic Affairs (SECO), 155,998 unemployed people were registered with the regional employment centers at the end of May 2020, 2,585 more than in the previous month. The unemployment rate rose from 3.3% in April 2020 to 3.4% in the reporting month. Unemployment rose by 54,628 people (+ 53.9%) compared to the same month in the previous year.

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Swiss Consumer Price Index in May 2020: -1.3 percent YoY, 0.0 percent MoM

04.06.2020 - The consumer price index (CPI) remained stable in May 2020 compared with the previous month, remaining at 101.3 points (December 2015 = 100). Inflation was –1.3% compared with the same month of the previous year.

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Switzerland GDP Q1 2020: -2.6 percent QoQ, -1.3 percent YoY

Switzerland’s GDP fell by –2.6 % in the 1st quarter of 2020, after rising by +0.3% in the previous quarter. Due to the coronavirus pandemic and the measures to contain it, economic activity in March was severely restricted. The international economic slump also slowed down exports.

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Weekly View – One country, two systems at risk

Last week, German chancellor Merkel delivered a surprise about-face when she and French president Macron announced a proposal for a EUR 500bn recovery fund in the wake of the coronavirus crisis. The unprecedented plan involves the distribution of grants, rather than loans, to member states in economic need.

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Swiss Trade Balance April 2020: foreign trade collapses

Compared with the previous month, April 2020 exports contracted by 11.7% (actual: -10.0%); this is the largest seasonally adjusted decline ever recorded. They retracted by 2.2 billion to reach 16.7 billion francs. Imports even plunged by 21.9%, that is, by a drop of 3.5 billion francs, to 12.4 billion francs (actual: -17.8%); they thus fell almost to their July 2005 level. The trade balance closed with a record monthly surplus of 4.3 billion francs.

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Modern Monetary Theory makes inroads following coronavirus crisis

US policymakers’ bold actions in response to the coronavirus bear some traces of the free-wheeling deficits, repressed interest rates and central bank activism (money creation) that form the cornerstones of the Modern Monetary Theory (MMT) playbook.

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House View, May 2020

With leading economies likely facing double-digit declines in GDP in Q1 and Q2, we expect Brent oil in the USD10–20 range in Q2 before reaching a long-term equilibrium of USD18 at year’s end. With consumers tempted to remain cautious, the oil sector in deep difficulty and a big rise in unemployment, we expect dire Q2 GDP figures for the US. We have reduced our GDP forecast for 2020 as a whole to -7.7%.

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Swiss Producer and Import Price Index in April 2020: -4.0 percent YoY, -1.3 percent MoM

14.05.2020 - The Producer and Import Price Index fell in April 2020 by 1.3% compared with the previous month, reaching 98.1 points (December 2015 = 100). The decline is due in particular to lower prices for petroleum products, petroleum and natural gas. Compared with April 2019, the price level of the whole range of domestic and imported products fell by 4.0%.

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7.9 billion hours worked in 2019

12.05.2020 - In 2019, people spent 7.929 billion hours working. Between 2014 and 2019, the actual weekly hours worked by full-time employees fell by 15 minutes on average, reaching 41 hours and 2 minutes. At the same time, the number of weeks of annual holiday continued its gradual increase to 5.2 weeks, according to the latest results from the Federal Statistical Office (FSO).

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Swiss Consumer Price Index in April 2020: -1.1 percent YoY, -0.4 percent MoM

05.05.2020 - The consumer price index (CPI) fell by 0.4% in April 2020 compared with the previous month, reaching 101.3 points (December 2015 = 100). Inflation was –1.1% compared with the same month of the previous year.

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Swiss Retail Sales, March 2020: -6.2 percent Nominal and -5.6 percent Real

Turnover adjusted for sales days and holidays fell in the retail sector by 6.2% in nominal terms in March 2020 compared with the previous year. Seasonally adjusted, nominal turnover fell by 6.0% compared with the previous month. Following the COVID-19 pandemic, turnover slumped markedly in some sectors.

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Swiss Trade Balance Q1 2020 : chemistry-pharma keeps exports in black numbers

The boom in chemicals and pharmaceuticals enabled Swiss exports to increase in March as well as in the first quarter of 2020 (+ 2.2% respectively + 1.0%). Despite the global economic situation linked to the “Covid-19”, the performance of this sector offset the decline suffered by most of the other groups. As in the previous quarter, seasonally adjusted imports fell (- 2.8%). The trade balance for the first three months of 2020 ends with a surplus...

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Swiss Producer and Import Price Index in March 2020: -2.7 percent YoY, -0.3 percent MoM

16.04.2020 - The Producer and Import Price Index fell in March 2020 by 0.3% compared with the previous month, reaching 99.4 points (December 2015 = 100). This decline is due in particular to lower prices for petroleum products. Compared with March 2019, the price level of the whole range of domestic and imported products fell by 2.7%.

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A reality check on China’s return to work

The recent recovery in industrial activity seems to have stalled, probably because of the collapse in external demand and high levels of vigilance inside China. Since the large-scale coronavirus infection was contained, the Chinese government has been trying hard to get the economy back on track. The end of the lockdown in Wuhan after two in a half months is an important milestone in that respect.

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Central banks to the rescue

While expecting long-term yields to be capped, we remain neutral on US Treasuries. We think peripheral euro area bonds to avoid the levels of stress seen during the sovereign debt crisis.

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Switzerland’s population continued to increase and age in 2019

09.04.2020 - At the end of 2019, Switzerland had a population of 8 603 900, i.e. 59 400 persons (+0.7%) more than in 2018. Since 2017, the population has grown more slowly than in previous years. Zurich recorded the greatest increase while Appenzell Innerrhoden, Neuchâtel, Nidwalden and Ticino saw their population decline.

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Swiss Consumer Price Index in March 2020: -0.5 percent YoY, +0.1 percent MoM

02.04.2020 - The consumer price index (CPI) increased by 0.1% in March 2020 compared with the previous month, reaching 101.7 points (December 2015 = 100). Inflation was –0.5% compared with the same month of the previous year. These are the results of the Federal Statistical Office (FSO).

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