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.

Cut to Swiss inflation forecast

The Swiss National Bank has revised down its medium-term forecast for consumer inflation. We still expect a first SNB rate hike in September 2019. At the end of its quarterly monetary assessment meeting, the Swiss National Bank (SNB) left its main policy rates unchanged.

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Italian material deprivation rates still the worst among large euro area economies

Latest poverty figures provide government with an argument for fiscal stumulus.Severe material deprivation rates gauge the proportion of people whose living conditions are severely affected by a lack of resources. According to Eurostat, “it represents the proportion of people living in households that cannot afford at least four of the following nine items: mortgage or rent payments, utility bills, hire purchase instalments or other loan payments;...

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Contrasting Fortunes within the Euro Area

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...

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Swiss Trade Balance August 2018: Exports above the 18 billion Franc Mark

After the dynamism registered until May 2018, Swiss foreign trade has been stalled since. In August and after seasonal adjustment, exports stagnated at a high level and imports fell by 1.1%. The trade balance has a surplus of 1.4 billion francs.

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European labour market remains in rude health

But there is room for further improvement.This week euro area employment data confirmed that labour market recovery remains on track. Employment grew at 0.4% q-o-q in Q2 2018, marking the 20th consecutive quarter of expansion. Employment is now 2.4% above its pre-crisis (2008) level. Since Q2 2013, 9.2 million jobs have been created in the euro area.

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A successful bank should be boring

No changes to the ECB’s monetary stance and policy guidance mean we are holding to our forecasts for quantitative easing and rate hikes.The ECB made no change to its monetary stance and policy guidance at its 13 September meeting. The end of quantitative easing (QE) was confirmed for after December, following a final reduction in the pace of net asset purchases to EUR15bn per month in Q4 2018.Much of the focus was on the updated ECB staff...

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Swiss Producer and Import Price Index in August 2018: +3.4 percent YoY, unchanged MoM

The Producer and Import Price Index remained unchanged in August 2018 compared with the previous month. The index stood at 103.4 points (December 2015 = 100). Prices were higher in particular for pharmaceutical and chemical products, while scrap became cheaper. Compared with August 2017, the price level of the whole range of domestic and imported products rose by 3.4%.

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Switzerland Q2 growth numbers are impressive, but details are mixed

Manufacturing and sports events served as boosts to growth, while domestic consumption was a letdown.The latest Swiss GDP figures were impressive. According to the State Secretariat for Economic Affairs’ quarterly estimates, Swiss real GDP grew by 0.7% q-o-q in Q2, slightly above our 0.6% projection and consensus. Average growth in the first half of 2018 was therefore the strongest since 2010.

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Switzerland Unemployment in August 2018: Unchanged at 2.4percent, seasonally adjusted unchanged at 2.6percent

Registered unemployment in August 2018 - According to SECO surveys, at the end of August 2018, 107,893 unemployed people were enrolled in the Regional Employment Centers (RAV), 1,841 more than in the previous month. The unemployment rate remained at 2.4% in the month under review. Compared to the same month of the previous year, unemployment fell by 27,685 people (-20.4%).

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Switzerland GDP Q2 2018: +0.7 percent QoQ, +3.4 percent YoY

The Swiss economy once again recorded dynamic growth in the 2nd quarter of 2018. GDP (+0.7%) expanded at an above-average rate for the fifth quarter in a row. This ex-pansion was largely supported by manufacturing, which has been experiencing a re-markable upturn since spring of 2017. Exports of goods increased accordingly.

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Swiss Consumer Price Index in August 2018: +1.2 percent YoY, Stable MoM

Neuchâtel, 4 September 2018 (FSO) - The consumer price index (CPI) remained stable in August 2018 compared with the previous month, remaining at 101.8 points (December 2015 = 100). Inflation was 1.2% compared with the same month of the previous year. These are the results from the Federal Statistical Office (FSO).

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Swiss Retail Sales, July 2018: +0.3 percent Nominal and -0.3 percent Real

Turnover in the retail sector rose by 0.3% in nominal terms in July 2018 compared with the previous year. Seasonally adjusted, nominal turnover fell by 0.9% compared with the previous month.

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Italian 2019 draft budget: a bumpy road ahead

Tensions between Rome and Brussels could lead to significant market volatility before an agreement is found. September will be a key month for gauging the Italian government’s budgetary plans for 2019. The government has communicated neither a precise timeline for implementing the measures announced in its ‘contract for government’ nor a precise cost analysis for these measures.

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KOF Economic Barometer: Falling

In August 2018, the KOF Economic Barometer fell slightly by 1.4 points to a new reading of 100.3. It thus now pints to a level that is only marginally above its long-term average. Accordingly, in the near future Swiss growth should hover around its average over the last ten years.

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Employment Barometer in the Q2 2018: Sharp Rise in Employment in Switzerland

In the 2nd quarter 2018, total employment (number of jobs) rose by 2.1% in comparison with the same quarter a year earlier (+0.4% with previous quarter). In full-time equivalents, employment in the same period rose by 2.0%. The Swiss economy counted 14 000 more vacancies than in the corresponding quarter of the previous year (+22.6%) and the employment outlook indicator is also indicating an upward trend (+1.1%). These are some of the findings from...

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Euro Area PMIs: Still Little Good News Below the Surface

Although euro area flash PMI indices were roughly in line with expectations in August, some details were less positive than the headline numbers, suggesting that downside risks have not yet disappeared. True, at face value, the small rise in the euro area composite PMI index, from 54.3 in July to 54.4 in August, is consistent with resilient real GDP growth, close to the 0.4% q-o-q pace recorded in Q2.

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Swiss Trade Balance July 2018: Slowdown to a High Level

After stagnating the previous month, both exports and imports fell in July 2018. In seasonally adjusted terms, they fell by 3.0 and 2.8%, respectively. The decline in the chemicals-pharmaceuticals sector weighed on the result in both directions of the traffic. The trade balance is closing with a surplus of 1.2 billion francs.

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A trying time for euro

The euro has hit new lows against the US dollar. We are revising down our EUR/USD projections for the next few months.The euro broke to the downside from its tight trading range relative to the US dollar since the end of May. These new lows go against our expectations of a gradual appreciation of the single currency relative to the greenback in the second half of the year and indicate that we have underestimated the short-term risks related to the...

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London House Prices Fall At Fastest Rate Since Height Of Financial Crisis

– London house prices fall at the fastest annual rate since height of the financial crisis – London house prices fall in 5th month in row, worst falls since 2009 – London rents dropped at the fastest rate in eight years – ONS – Brexit, London property slump put brake on UK house price growth – Consumer spending declined in July as inflation increased

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Swiss Labour Force Survey in 2nd quarter 2018: Number of persons in employment rises by 0.7 percent, unemployment rate based on ILO at 4.6 percent

The number of employed persons in Switzerland rose by 0.7% in the 2nd quarter 2018 compared with the same quarter of the previous year. The unemployment rate as defined by the International Labour Organisation (ILO) rose during the same period by 0.2 percentage points to 4.6%. The EU's unemployment rate based on the ILO definition decreased from 7.6% to 6.9%.

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