Category Archive: 2.) Pictet Macro Analysis

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Pictet Perspectives — Towards ‘Chinafication’

2019-10-03

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With growth indicators faltering and markets unsettled, policy makers in advanced economies are being forced to look at new ways to prolong the expansion. In many ways, their concerns are the same as their Chinese counterparts’. Could (Should) they also adopt Chinese economic policies? https://www.group.pictet/wealth-management

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MMT, la nouvelle théorie en vogue à Washington

2019-09-22

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2019-09-22

Bank Reserves (at Fed) 1995-2019
L’influence du ‘Modern Monetary Theory’ est susceptible d’augmenter dans les milieux économiques et politiques américains.La nouvelle théorie monétaire (Modern Monetary Theory/MMT), théorie macroéconomique défendue par des économistes hétérodoxes, commence à faire son chemin aux Etats-Unis.

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Euro/USD: things look pretty stable

2019-09-21

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2019-09-21

EUR/USD vs Leading Indicators Spread, 2006-2020
Competing forces mean the two currencies could remain in a holding pattern for a while.The euro has remained relatively stable relative to the US dollar in the wake of the European Central Bank (ECB) and US Federal Reserve (Fed) September policy meetings. Growth and interest rate differentials, two key drivers for the EUR/USD rate, suggest things could stay this way.

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Powell plays the ‘insurance’ card again

2019-09-19

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2019-09-19

The Market Continues to Distrust the FED Dot Plot, Which Shows no Additional cut, 2018-2021
In spite of internal divisions, the Fed may go for a third rate cut in October and step in to alleviate pressure in repo market.The Federal Reserve (Fed) cut rates by 0.25% on Wednesday, as widely anticipated. The new fed funds target range is 1.75%-2.00%. The interest rate on banks’ excess reserves was cut by 0.30% to 1.80%.

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Oil prices and the global economy

2019-09-11

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2019-09-11

Oil Prices, 2018-2019
Low oil prices are good news for disposable income. But they also reflect the risk of oversupply in a world where growth indicators continue to point down.Events since Trump first threatened increased tariffs in 2017 provide a textbook example of how tariffs are transmitted through the global economy. First, the uncertainty they create hurts sentiment.

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Swiss National Bank – Between a rock and a hard place

2019-09-10

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2019-09-10

Swiss Quarterly GDP Growth, 2011-2019
We expect the Swiss National Bank to stay on hold at its next policy meeting, but a lot will depend on ECB and Fed meetings.Uncertainties and global slowdown are weighing on business investment in Switzerland, while household consumption growth has been slowing. Swiss GDP rose by 0.3% q-o-q in Q2 (down from 0.4% in Q1), mainly due to spending in healthcare, housing and energy.

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Pictet Perspectives — What can investors do in uncertain times?

2019-09-09

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While a global recession may not be imminent, we are clearly late in the cycle and economies and markets are not immune from accidents. Certain well-defined investment themes are particularly relevant at this juncture, argues Pictet Wealth Management’s head of investments.

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Pictet Perspectives — What can investors do in uncertain times?

2019-09-09

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While a global recession may not be imminent, we are clearly late in the cycle and economies and markets are not immune from accidents. Certain well-defined investment themes are particularly relevant at this juncture, argues Pictet Wealth Management’s head of investments.

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Brazilian real stands out in EM currency scorecard

2019-08-21

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2019-08-21

EM FX Scorecard, August 21
Prospects for emerging-market currencies look cloudy. The currencies of countries with sound external buffers and limited exposure to global trade should fare relatively better than others.In recent months, the global environment has become more challenging for EM currencies. Trade tensions have increased and are weighing on economic activity. Commodity prices have also fallen.

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Emerging market sovereign debt update: yields are falling

2019-08-19

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2019-08-19

Inflation and Policy Rates Average in Some EM, 2012-2019
Yields have fallen significantly in the EM sovereign bond space in local currency; USD movements will be key to watch for going forward.Yields have fallen impressively in the emerging market (EM) sovereign bond space in local currency, reaching 5.3% on 16 August, near their all-time low of 5.2% (in May 2013). This downward movement has been partly driven by the recent policy rate cuts of some EM central banks.

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Italy: Back to polls in Q4 2019?

2019-08-17

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2019-08-17

Italy: Key Upcoming Dates, 2019
Recent developments in Italy’s political landscape have increased the probability of early elections in Q4 2019, but the situation is not so straightforward. Last week, political tensions in Italy intensified as Matteo Salvini, the League’s leader triggered a no confidence vote against Prime Minister Giuseppe Conte.PM Conte will address the Senate on 20 August.

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New monetary policies for new challenges

2019-08-16

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2019-08-16

Towards a New Monetary Policy Style, 1981-2029
As central banks try (yet again) to bolster faltering growth and inflation, it is important to grasp how the ‘style’ and aims of monetary policy-making have changed over time and how they need to evolve in the future.The world is being disrupted by structural trends such as populism, demographic and climate change and technological innovation.

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DATA ADDS TO THE CASE FOR ECB ACTION IN SEPTEMBER

2019-08-01

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2019-08-01

Euro Area Real GDP Growth, 2013-2019
Slowing economic momentum in the euro area means that we are lowering our GDP forecasts for this year. The euro area economy grew by 0.2% q-o-q in Q2, down from 0.4% in Q1.While 0.2% is still a decent pace of growth, concerns about the economy in the second half of the year have increased. Recent data have shown that the industrial slump has started to leave some marks on the domestic economy.

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BREXIT UNCERTAINTY TO WEIGH ON YIELDS

2019-07-26

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2019-07-26

UK 10-YEAR Gilt Yield Breakdown and Forecast, 2014 - 2019
UK sovereign bond (gilts) yields have fallen this year, with the 10-year yield dropping by 59 basis points (bps) to 0.69%1, in concert with other core sovereign bond yields. The Brexit saga, along with the global slowdown forcing many central banks to turn dovish, are the main factors behind this steep fall.

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DM credit caught between opposing forces

2019-07-24

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2019-07-24

EURO AND US IG CREDIT SPREADS
Despite the impressive year-to-date performance of corporate credit, we remain prudent about prospects in the remainder of 2019.Corporate bonds have posted stellar total returns year to date, thanks to the positive combination of lower sovereign yields and tighter credit spreads.

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Semaña grande for Sánchez

2019-07-23

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2019-07-23

Spain Generic Government 10Y Yield, 2015-2019
The interim Spanish prime minister, the socialist Pedro Sánchez, will aim to form a government this week. Outside the political noise, the Spanish economy continues to do well.April’s elections in Spain resulted in a fragmented parliament, making the formation of a government complicated.

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Euro area manufacturing is not out of the woods

2019-07-19

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2019-07-19

Euro Area Industrial Production, MoM 2019
Industrial production rebounded in May. But a closer look shows that the improvement was narrowly spread, and euro area manufacturing faces numerous challenges ahead.After two consecutive months of contraction, euro area industrial production (IP, excluding construction) rose by 0.9% month on month (m-o-m) in May, above consensus expectations.

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Pictet — Multi-Generational Wealth

2019-07-17

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Making sound investments and steering a company through today’s political and economic waters can be tricky. At Pictet’s 2019 European Family Master Class in Zürich, a line-up of eminent guest speakers and the Swiss bank’s own financial experts unpacked the world of geopolitics, business governance, economic forecasts, technology innovation and one’s responsibility – whether social or environmental – as a player in today’s markets. Guest panellists...

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Pictet — Multi-Generational Wealth

2019-07-17

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Making sound investments and steering a company through today’s political and economic waters can be tricky. At Pictet’s 2019 European Family Master Class in Zürich, a line-up of eminent guest speakers and the Swiss bank’s own financial experts unpacked the world of geopolitics, business governance, economic forecasts, technology innovation and one’s responsibility – whether social …

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Powell’s Congressional testimony sets the scene for rate cut

2019-07-13

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2019-07-13

Median Fed estimate for neutral rate, Fed rate
The Fed will likely cut rates by 25 basis points on 31 July, with a similar cut possible as early as September.During his testimony before the House of Representatives on Wednesday, Federal Reserve Chairman Jerome Powell repeated the dovish signals he gave at the Fed press conference in June, hinting at a rate cut at the next Federal Open Market Committee (FOMC) meeting on 31 July.

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