Category Archive: 2.) Pictet Macro Analysis

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Italian 2019 draft budget: a bumpy road ahead

2018-08-31

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2018-08-31

Italian Fiscal Timeline
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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A trying time for euro

2018-08-21

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2018-08-21

EUR/USD vs. EA - US growth differential as % (with AA&MR projections)
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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Revising our euro area 2018 GDP growth forecast down

2018-08-01

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2018-08-01

Euro area real GDP growth and EC economic sentiment index, 2005 - 2018
The cut to our growth forecast reflects slippage in euro area data.According to Eurostat’s preliminary flash estimate, euro area real GDP expanded by 0.3% q-o-q in Q2 2018, below consensus expectations. This was the weakest growth in two years and is down slightly from GDP growth of 0.4% q-o-q in Q1.Following today’s GDP growth data and recent economic indicators, we have revised down our GDP growth forecast for 2018.

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Pictet – The Family Consilium (Abridged version)

2018-07-30

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The world is becoming increasingly unpredictable, as new geopolitical faultlines emerge and challenge the long-held status quo. This was the key lesson to emerge from the Pictet Family Consilium, which took place in the Swiss mountain resort of Gstaad in June. The central theme of this year’s exclusive biannual event was ‘“Who Owns the Future?”. …

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Pictet – The Family Consilium (Full version)

2018-07-30

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The world is becoming increasingly unpredictable, as new geopolitical faultlines emerge and challenge the long-held status quo. This was the key lesson to emerge from the Pictet Family Consilium, which took place in the Swiss mountain resort of Gstaad in June. The central theme of this year’s exclusive biannual event was ‘“Who Owns the Future?”. …

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Ceasefire in US/EU tariff dispute

2018-07-28

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2018-07-28

EU and US: average trade tariff rate 1990-2018
The two sides have agreed to discuss lowering barriers to transatlantic trade, helping to de-escalate tensions. While positive, the US’s dispute with China still needs watching.US President Trump and EU Commission President Juncker this week struck an unexpected deal to de-escalate the trade dispute between the EU and the US.

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What will the rest of the year bring?

2018-07-17

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2018-07-17

Risk assets have disappointed this year and global equities were trendless, but as long as fundamentals can re-assert themselves, there could still be some life in risk markets.Global equities were trendless and the overall performance of risk assets lacklustre in the first half of 2018.

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Europe chart of the week – UK GDP growth

2018-07-13

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2018-07-13

UK monthly GDP Jun 2016-Jun 2018
Short-term rebound in the UK, driven by services.The Office for National Statistics (ONS) published this week a new rolling monthly estimate of UK GDP. The release pointed to a rebound of growth in Q2 (quarterly data will be published on August 8). According to the ONS, the rolling three-month growth to end-May was 0.2%, compared to 0% in the three months to end-April (see chart below).Looking at the details, the services sector (79% of the...

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In Conversation With Mattias Ljungman

2018-06-28

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Future-facing companies and disruptive business models are what Mattias Ljungman, co-founder and partner at Atomico, is all about. Mattias believes in the power of technology to shape the future of investments and he’s particularly excited about the growth potential of the gaming industry – the subject of his presentation at the Latam Family Office Master …

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European cars at a crossroad

2018-06-18

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2018-06-18

European Union: New car registrations 2010-2018
Falling momentum in new car sales, together with the threat of US tariffs is adding to the uncertainty facing the European car industry.Last weekend’s G7 summit in Canada ended badly, with President Trump withdrawing his support for the summit’s final statement. Heightening tensions between Europe and the US are Trump’s hints that the White House is considering import tariffs on cars and car parts.

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ECB gets ready to make the leap

2018-06-12

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2018-06-12

ECB Policy Rate, Jan 2018 - June 2018
The ECB has had essentially two options going into the June meeting: either a dovish decision but a hawkish communication (hinting at an imminent QE tapering), or a hawkish decision but a dovish communication (counterb alancing a tapering announcement with dovish sweeteners).

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Pictet – In Conversation With Alexandre Tavazzi

2018-06-12

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This year has clearly been defined by market volatility – and it feels a long way from the boom times of last year. But the message from Alexandre Tavazzi – a global strategist at Pictet Wealth Management – is that growth remains robust and investors simply need to be more nimble. He spoke from the … Continue reading...

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Europe chart of the week-German new orders

2018-06-11

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2018-06-11

Germany: three measures of new factory orders 2011-2018
German new orders were weak across the board in April, contracting for a fourth consecutive month and by a larger-than-expected 2.5% m-o-m following a downwardly-revised 1.1% drop in March. As a result, total manufacturing orders are off to an extremely weak start in Q2 (-3.3% q-o-q after -2.2% q-o-q in Q1). What is more, the decline in demand for German goods in April was fairly broad-based across countries and sectors.

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Pictet — In Conversation With Alfonso Prat-Gay

2018-06-07

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Latin America is at a crossroads in 2018 with several regional powerhouses heading to the polls. And while plenty is yet to be defined – both economically and politically – there are also causes for optimism as populism arguably shifts out of the region and into North America. Alfonso Prat-Gay, Argentina’s former finance minister and …

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Europe chart of the week – Spanish growth

2018-06-05

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2018-06-05

Spain GDP and EC Economic Sentiment Index, 2006 - 2018
This week saw the final release of Spanish GDP growth for Q1. The economy again managed to post robust growth, the highest among the four largest euro area economies (+0.7% q-o-q versus 0.4% q-o-q for the euro area). The breakdown of figures showed that domestic demand was once again the main growth driver.

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Euro area inflation close to ECB target in May

2018-06-03

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2018-06-03

Euro Harmonised Index of Consumer Prices Inflation and ECB Staff Projections
Today’s release of euro area flash HICP surprised to the upside both in terms of headline inflation (which surged from 1.2% to 1.9% y-o-y in May, above consensus expectations of 1.6%) and, crucially, in terms of core inflation (HICP excluding energy, food, alcohol and tobacco rose from 0.7% to 1.1%).

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Spain Snap Elections in Sight

2018-06-02

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2018-06-02

Spain Politics in General Election
Political instability in Spain has added to turmoil in other peripheral countries. The situation is not comparable with the one that Italy is experiencing at the moment, but since it comes at the same time it is increasing market volatility. Last Friday, Spain’s main oppositionparty, the Socialist party (PSOE) filed a no confidence vote against Prime Minister Mariano Rajoy. The debate will start on May 31 with a vote probably on June 1.

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Italy heads towards new elections

2018-06-01

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2018-06-01

Italian polls on voting intentions in the next general election
Fragmented politics and the risk of a financial crisis continue to hang over the country.This weekend, the Five Star Movement and the League decided to pull the plug on their attempt to form a coalition government after the President of the Republic Sergio Mattarella vetoed the appointment of anti-euro professor Paolo Savona as minister of finance. Mattarella has granted ex-International Monetary Fund official, Carlo Cottarelli, a mandate to form a...

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Pictet – Multi-Generational Wealth, Nassau

2018-06-01

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THE ROLE OF REAL ASSETS IN A VIRTUAL WORLD? The fifth edition of the Latam Family Office Master Class took place in Nassau in April 2018, with more than 60 guests attending. This year the focus was around geopolitics, digital revolution, alternative investments and family governance. Among the speakers, we had the pleasure of welcoming …

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ECB: contingency plans

2018-05-25

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2018-05-25

ECB’s policy rates and asset purchases, including projections
A look at different scenarios for the ECB’s exit from quantitative easing and its expected rate hiking cycle.Our baseline scenario for ECB normalisation still holds. We expect QE to end in December 2018 and a first rate hike in September 2019. The ECB is likely to wait until its 26 July meeting to make its decisions on QE and forward guidance.Still, downside risks have risen to the point where another open-ended QE extension can no longer be ruled...

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