Category Archive: 2.) Pictet Macro Analysis

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Brexit update: UK parliament opts for an extension

2019-03-18

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2019-03-18

GBP/USD Exchange Rate 2018-2019
After an eventful week in parliament, the Brexit ball is set to keep rolling as MPs move to extend the 29 March deadline.The British Parliament concluded a series of votes on Brexit this week with an intention to extend the 29 March Brexit deadline. What remains unclear at this point is whether the UK will seek a short (two months) or a longer extension (two years).

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Euro slides against the dollar on ECB dovishness

2019-03-15

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2019-03-15

EUR-USD and 10-year Real Rate Differential 2014-2019
The euro has declined further against the dollar but should strengthen over next 12 monthsThe euro fell to a 20-month low against the US dollar following the European Central Bank’s (ECB) March policy meeting, given the revised forward guidance that suggests that the interest rate differential is unlikely to provide much upside to the euro in the next few months.

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ECB Forward Guidance: the Devil is in the Detail

2019-03-14

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2019-03-14

ECB Policy Rates, 2006 - 2019
Last week, the European Central Bank (ECB) announced a new long-term refinancing package for banks (called TLTRO-III) and made clear that interest rates would not be raised this year. While these measures were expected, they have come earlier than we thought.

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ECB: to LTRO, or not LTRO, what is the question?

2019-03-06

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2019-03-06

Stylised policy options for new (T)LTRO
The ECB’s decision on (T)LTRO will matter most to the euro area periphery banks who have been the biggest consumers of current TLTROs. Considering the weakness in most economic indicators the ECB should maintain an adequate degree of monetary accommodation.

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Gold to consolidate before further leg up

2019-02-20

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2019-02-20

Gold Demand Breakdown 2000-2019
Some recent factors supporting gold are fading. However, while gold could sag in the short term, medium-term prospects look better.Last year ended on a very strong note for gold demand, with a significant increase in jewellery and investment demand in the fourth quarter (see chart), leading to strong price performance (7.7% in US dollar terms in Q4).

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Pictet Perspectives – What to expect from central banks this year

2019-02-18

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Following the Fed’s recent dovish turn, we could expect other central banks to follow suit. However, according to Frederik Ducrozet, Strategist at Pictet Wealth Management, the ongoing trade tensions and idiosyncratic constraints facing central banks today could limit their room to manoeuvre. We expect the European, Japanese and Chinese central banks to contribute to rising global liquidity this year, more than offsetting any quantitative...

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Pictet Perspectives – What to expect from central banks this year

2019-02-18

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Following the Fed’s recent dovish turn, we could expect other central banks to follow suit. However, according to Frederik Ducrozet, Strategist at Pictet Wealth Management, the ongoing trade tensions and idiosyncratic constraints facing central banks today could limit their room to manoeuvre. We expect the European, Japanese and Chinese central banks to contribute to rising …

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Euro area : What if car tariffs lie ahead ?

2019-02-16

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2019-02-16

Share in value added of Exports of car and car parts to the US
New US auto tariffs may impact the economy significantly more than the previous tariffs on steel and aluminium.Among the key risks for our euro area outlook, the threat of US auto tariffs is of major importance.The US Commerce Department’s investigation on national security threats posed by auto imports is due to be concluded on 17 February.

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Exports save the day for French GDP growth

2019-01-31

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2019-01-31

French Quarterly GDP, Q1 2016 - Q1 2018
Prospects for French economic growth are looking up, but disruptions to consumption are possible.French GDP rose by 0.3% quarter-on-quarter (q-o-q) in Q4, the same pace as in Q3. The details reveal that Q4 exports surged significantly, while household consumption and investment slowed. This left growth for the year at +1.5%, following +2.3% in 2017.

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Update on euro area economic activity

2019-01-25

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2019-01-25

Euro Area Real GDP Growth and GDP Estimate Based on PMI 2001-2019
The balance of risks to growth in the region is still tilted to the downside.The big question about the euro area economy is when the bottom of the slowdown will be reached. A rebound was already expected in Q4 2018, but at the start of this year there are still few signs of recovery. Flash composite PMI numbers for the region declined by 0.4 points to 50.7 in January, the weakest level since July 2013.

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European Central Bank likely to stick to script

2019-01-21

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2019-01-21

Falling ECB Market Rate Hike expectations 2018-2019
The ECB is comfortable with current market expectations for rate hikes.At its latest meeting in December, the ECB turned more cautious, lowering its growth forecasts but showing no sign of panic regarding the loss in euro area economic momentum. Risks were considered as “broadly balanced”, but moving to the downside.

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Pictet — Perspectives: The “Three Amigos”

2019-01-18

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2018 was a difficult year for markets and according to César Pérez Ruiz, Pictet Wealth Management’s Head of Investments and CIO, 2019 will be a year in which the “three amigos” will have to coexist. The bull will appear in economic deceleration, the bear in a democratic recession and the kangaroo across market dynamics. https://www.group.pictet/wealth-management

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Pictet — Perspectives: The “Three Amigos”

2019-01-18

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2018 was a difficult year for markets and according to César Pérez Ruiz, Pictet Wealth Management’s Head of Investments and CIO, 2019 will be a year in which the “three amigos” will have to coexist. The bull will appear in economic deceleration, the bear in a democratic recession and the kangaroo across market dynamics. https://www.group.pictet/wealth-management

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Outlook for euro periphery bonds

2019-01-17

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2019-01-17

Italian Sovereign Spread and Italian Banks CDS 2011-2019
Economic fundamentals should come back into focus, but politics still a factor.After a year when peripheral countries’ old demons made a reappearance, with, in particular, Italy’s public debt back in the spotlight, the focus should shift to economic fundamentals in 2019. Both the Spanish and Italian economies are set to slow down, although the situation is more serious in Italy.

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Concerns about Italy have not gone away

2019-01-14

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2019-01-14

Italian Real GDP Growth and Surveys, Q1 2012-Q1 2018
Rome and Brussels reached a compromise on the Italian government’s budget plans last month. But there are plenty of reasons for thinking this will be a challenging year for Italy.After battling for more than two months over a 2019 budget plan defiantly non-compliant with the EU fiscal rules, Rome and Brussels struck a last-minute agreement in December that avoided opening an Excessive Deficit Procedure (EDP).

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UK Politicians remain stuck in the mire

2019-01-13

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2019-01-13

Brexit - Simplified view of possibilities ahead
Next week’s vote on the divorce deal is likely to be defeated, and there is precious little time for an alternative before the Brexit deadline in March.The British parliamentary vote on Theresa May’s EU divorce deal will be on 15 January. The deal is likely to be rejected, as there has been little progress since December, when a first vote was called off for lack of support.

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Germany is Stagnating

2019-01-12

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2019-01-12

Germany Industrial Production and Manufacturing PMI, 2012 - 2018
Sagging industrial production and confidence figures point to weak Q4 GDP. German industrial production (including construction) fell by 1.9% month-on-month in November, extending the sector’s decline to five out the six last prints. Year on year, industrial production was down by 4.6%, the worst performance since November 2009.

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Core Euro Sovereign Bonds 2019 Outlook

2018-12-23

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2018-12-23

10 Year Bund Yield and EONIA Pricing, 2016 - 2018
In our central scenario, we expect the 10-year Bund yield to rise gradually to 0.8% by the end of next year from 0.26% on 17 December. Underpinning this upward movement is our expectation of a cumulative deposit rate hike of 40 basis points (bps) by the ECB, against current market expectations of only 10 bps.

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Pictet – Multi-Generational Wealth, Singapore (Abridged version)

2018-12-18

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In Asia, we are seeing a generational shift as the region’s wealth creators hand over stewardship of family wealth to their sons and daughters. As this second generation’s influence grows, the management of family assets and investments is becoming increasingly sophisticated. Over the years, Pictet has been a successful partner in helping both families and their Family Offices to complete this process, and it was among the topics addressed during...

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Pictet – Multi-Generational Wealth, Singapore (Full version)

2018-12-18

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In Asia, we are seeing a generational shift as the region’s wealth creators hand over stewardship of family wealth to their sons and daughters. As this second generation’s influence grows, the management of family assets and investments is becoming increasingly sophisticated. Over the years, Pictet has been a successful partner in helping both families and their Family Offices to complete this process, and it was among the topics addressed during...

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