Category Archive: 2.) Pictet Macro Analysis

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

2018-11-17

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2018-11-17

GBP/USD drops after Theresa May's cabinet approves the Eu divorce deal
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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Pictet – In Conversation with Edward Luce

2018-11-16

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With geopolitical currents challenging the west’s long-standing liberal status quo, we live in an age of global uncertainty. But even as the world enters what has been described as a “democratic recession”, there’s cause for optimism. Edward Luce is The Financial Times’ US national editor; at Pictet’s 2018 Investment Summit he outlined how beneficial a truly global perspective can be in the face of change....

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Pictet – In Conversation with Edward Luce

2018-11-16

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With geopolitical currents challenging the west’s long-standing liberal status quo, we live in an age of global uncertainty. But even as the world enters what has been described as a “democratic recession”, there’s cause for optimism. Edward Luce is The Financial Times’ US national editor; at Pictet’s 2018 Investment Summit he outlined how beneficial a …

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Pictet – Investment Summit

2018-11-15

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The world is at a crossroads: while geopolitical tensions threaten to upend the established order, developments in areas such as healthcare and technology offer new vistas of possibility for humanity. Uncertainty may seem to be the order of the day but Pictet’s Investment Summit offered a more reassuring message. With more than 200 years of experience, the bank has negotiated the currents of change before; at Pictet’s headquarters in the heart of...

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Pictet – Investment Summit

2018-11-15

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The world is at a crossroads: while geopolitical tensions threaten to upend the established order, developments in areas such as healthcare and technology offer new vistas of possibility for humanity. Uncertainty may seem to be the order of the day but Pictet’s Investment Summit offered a more reassuring message. With more than 200 years of …

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Italian government sticks to its 2019 deficit plan

2018-11-14

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2018-11-14

Italian: Credit Standards to Non-Financial Corporations
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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Euro area’s fiscal policy to turn supportive of growth next year

2018-11-12

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2018-11-12

Euro Area: Fiscal Stance chart
Modest fiscal easing could help counter mounting external risks and slowing growth indicators.Euro area member states have all submitted their 2019 Draft Budgetary Plans (DBP) to the European Commission (EC) by now. These show that, collectively and based on EU Commission’s autumn forecasts, the euro area’s fiscal stance1 will turn supportive in 2019, although it varies significantly from one country to the next.

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The Beginning of the End for Angela Merkel

2018-11-04

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2018-11-04

Germany Next General Elections, Sep 2017 - Nov 2018
As a consequence of the heavy drop of support in recent regional elections, Chancellor Merkel has declared she would not run again for leadership of the CDU at the 6-8 December party convention. Merkel also said she would retire from politics at the end of the current parliament in 2021. It is questionable whether she will get that far, and well before then, the transition to a new leader amid a loss of electoral support for the main centre-right...

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Rebound in inflation data brings some relief to the ECB

2018-11-02

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2018-11-02

Euro Area HICP Inflation, 2011 - 2018
Euro area flash HICP rose from 2.1% year on year (y-o-y) in September to 2.2% in October, in line with expectations and the highest level since December 2012. Crucially, core inflation (HICP excluding energy, food, alcohol and tobacco) rebounded from 0.9% to 1.1% in October.

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Euro area’s initial growth figures for Q3 prove disappointing

2018-10-31

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2018-10-31

US Versus Euro Area Real GDP Growth 2005-2019
While growth in France rebounded, Italy stalled in Q3. Our full-year forecast for the euro area remains unchanged but is clearly at risk.According to initial estimates, growth in the euro area slowed in Q3 to 0.2% q-o-q (quarter on quarter) from 0.4% in Q2. These latest GDP results were below consensus expectations and our own forecast.

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A Three Question Interview with Nicola Giammarioli, Frederik Ducrozet, and Michala Marcussen

2018-10-29

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“Financial Risk and Public Debt Management in the Euro Zone” The Johns Hopkins SAIS Global Risk Conference Nicola Giammarioli, European Stability Mechanism, Luxembourg Frederik Ducrozet, Pictet Wealth Management, Switzerland Michala Marcussen, Société Générale, France

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Pictet — In Conversation with Claus Kjeldsen

2018-10-22

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Consumers have today what Claus Kjeldsen, CEO of the Copenhagen Institute for Future Studies (Cifs), calls a “liquid identity.” This means trying to classify consumers by age and gender is no longer effective, and so Cifs studies future trends and scenarios through the lens of social and behavioural science, economics and technology. At the fifth Entrepreneur Summit in Geneva, Claus discussed how so-called strategic adaptation can be applied to...

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Pictet — In Conversation with Claus Kjeldsen

2018-10-22

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Consumers have today what Claus Kjeldsen, CEO of the Copenhagen Institute for Future Studies (Cifs), calls a “liquid identity.” This means trying to classify consumers by age and gender is no longer effective, and so Cifs studies future trends and scenarios through the lens of social and behavioural science, economics and technology. At the fifth …

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Pictet Entrepreneur Summit

2018-10-16

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Uncertainty is becoming the norm in our fast-changing world and business owners and investors are looking for answers in how to turn volatility into opportunity. A range of solutions were discussed in detail at the fifth edition of the Pictet Entrepreneur Summit, held in Geneva at the end of August. A key takeaway from this year’s event was put best by senior managing partner Nicolas Pictet, who said that established ideas about how business, trade...

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Pictet Entrepreneur Summit

2018-10-16

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Uncertainty is becoming the norm in our fast-changing world and business owners and investors are looking for answers in how to turn volatility into opportunity. A range of solutions were discussed in detail at the fifth edition of the Pictet Entrepreneur Summit, held in Geneva at the end of August. A key takeaway from this … Continue reading...

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Devil is in the details: Italian and French deficits are not quite comparable

2018-10-16

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2018-10-16

France Versus Italy: Government Budget Balance (% of GDP) 2009-2019
Italy’s structural weakness explain higher level of concern around its deficit target.Each EU member state is currently preparing 2019 budget plans for formal submission to the European Commission (EC) before mid- October. Among them, France and Italy’s budget plans have been raising eyebrows. Why is the EC concerned about Italy’s proposed 2.4% GDP deficit target for 2019 and not France’s target of 2.8%?

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Squaring off over the Italian budget

2018-10-10

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2018-10-10

Italy Macro Assumptions
The Italian government’s budget plans set it on a collision course with the European Commission. The road to some kind of agreement is likely to be long and bumpy. The Italian government has confirmed its deficit target at 2.4% of GDP for 2019. This represents significant slippage from a previous budget deficit target of 0.8% in 2019.

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German September PMIs surprisingly weak

2018-10-09

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2018-10-09

Germany Manufacturing Orders, 2012 - 2018
Recent German soft and hard data in the manufacturing sector has been surprisingly weak. Data released today showed that the final manufacturing PMI fell to 53.7 in September, from 55.9 in August. Factory orders rose by 2.0% month-on-month (m-o-m) in August, having contracted for six out of the seven previous months.

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Further consolidation of EUR/USD rate likely

2018-10-05

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2018-10-05

EUR/USD vs. GDP Growth Differential, 2000-2019
Short-term noise means we are neutral on the euro over the next three months, but see potential for its gradual appreciation against the dollar thereafterWe have long argued that growth and interest rate differentials are two key components for the direction of the US dollar. Both these drivers should continue to support the dollar over the short term.

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Chinese PMI data points to further growth moderation

2018-10-04

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2018-10-04

Chinese Official and Caixin PMIs
More policy support is expected, and may lead to slight rebound in Q4.China’s manufacturing PMIs softened further in September, indicating that growth momentum is likely continued to moderate in Q3 and that the weakness may extend into Q4.In response to the weakening growth momentum, especially in the context of escalating trade tensions with the US, the Chinese government has turned to policy easing since June.

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