Tag Archive: newsletter

Credit Conditions in the Euro Area Remain Supportive of Investment Recovery

2018-10-29

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2018-10-29

Euro Area Investment, 2005 - 2018
Investment is an important driver of the business cycle and a key determinant of potential growth. In the euro area, total investment makes up about 20% of GDP. Construction, machinery and equipment (including weapons systems), intellectual property rights and agricultural products account, respectively, for 48%, 32%, 18% and 2% of total investment.

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FX Weekly Preview: Thumbnail Sketch of Six Things to Monitor This Week

2018-10-29

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2018-10-29

Global equities have sold off hard. The magnitude of the recent loss is similar to what happened earlier this year. The MSCI World Index of developed countries fell 10.5% in January-February carnage and are now off about 11% this month. The MSCI Emerging Markets Index has matched the 11% loss back at the start of the year, but never truly recovering in between.

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What’s the Real Meaning of the Stock Market Swoon?

2018-10-29

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2018-10-29

S&P 500 Large Cap Index, Jul 2017 - Oct 2018
Economy has reached peak earnings so there's no fundamentals-driven upside left. Bond yields are now high enough to dampen enthusiasm for inherently risky stocks. Central banks curtailing / ending their quantitative easing programs have reduced liquidity in the financial system. US markets are catching up to the rest of the world's market slump.

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PostBus may lose some routes after scandal

2018-10-29

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2018-10-29

Post Bus
The state-owned PostBus company is threatened with losing bus routes in several regions, following a scandal over illegal subsidies. Jura is the first canton that will put its 38 routes out to tender next spring, SonntagsZeitungexternal link has reported.

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Investigating suspected welfare cheats – where to draw the line

2018-10-28

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2018-10-28

Welfare-investigation-Switzerland
On 25 November 2018, Swiss will vote on whether to accept laws allowing detectives to uncover welfare fraud. Currently, there is nothing specific in Swiss law covering the practice. In the past, investigators have been used to gather evidence on disability and accident beneficiaries. Between 2009 and 2016, detectives were used on around 220 investigations a year, of which around two thirds were found guilty of fraud.

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Switzerland expecting a 2.5 billion franc federal surplus for 2018

2018-10-28

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2018-10-28

The latest figures forecast Switzerland’s federal spending for 2018 will be CHF 0.9 billion less than expected. This and higher than expected receipts of CHF 1.3 billion add up to an extra CHF 2.2 billion on top of an original budget surplus of CHF 0.3 billion, bringing the total forecast federal surplus to CHF 2.5 billion.

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Self-Employment declining in Switzerland

2018-10-27

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2018-10-27

Self Employed Switzerland
The percentage of Switzerland’s workers working for themselves has been slowly declining. In 2010, 13.7% of workers were self-employed. By 2017, the figure was 12.8% – self-employed includes those working as independents and those working for companies they own.

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Monthly Macro Monitor – October 2018 (VIDEO)

2018-10-27

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2018-10-27

Monthly Macro Monitor October 2018
Economic thoughts and analysis from Alhambra Investments CEO Joe Calhoun.

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Contrasting growth in cantonal GDP in 2016

2018-10-26

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2018-10-26

Gross Domestic Product (GDP) by Greater Region and Canton, 2016
After a moderate 2015, economic growth increased slightly in most Swiss cantons in 2016. The most pronounced growth in the gross domestic product (GDP) was seen in the cantons of Vaud (+7.4%) and Schaffhausen (+4.2%). These results are taken from initial estimates of the Federal Statistical Office (FSO).

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Swiss still World’s Richest

2018-10-26

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2018-10-26

Swiss-wealth
According to the annual wealth report produced by Credit Suisse, Switzerland leads on wealth per adult with US$ 530,240, comfortably ahead of second-placed Australia where the figure is US$ 411,060. The US is third with US$ 403,060.

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No Such Thing As An 80 percent Boom

2018-10-26

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2018-10-26

Payrolls LF Participation, Jan 1995 - 2018
Many attribute the saying “a rising tide lifts all boats” to President John Kennedy. He may have been the man who brought it into the mainstream but as his former speechwriter Ted Sorenson long ago admitted it didn’t originate from his or the President’s imagination. Instead, according to Sorenson, it was a phrase borrowed from the New England Chamber of Commerce or some such.

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Eastern Monetary Drought

2018-10-26

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2018-10-26

Looking back at the past decade, it would be easy to conclude that central planners have good reason to be smug. After all, the Earth is still turning. The “GFC” did not sink us, instead we were promptly gifted the biggest bubble of all time –  in everything, to boot. We like to refer to it as the GBEB (“Great Bernanke Echo Bubble”) in order to make sure its chief architect is not forgotten.

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FX Daily, October 25: ECB Overshadowed by Equity Market Drama

2018-10-25

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2018-10-25

The Dollar Index broke above 96.00 yesterday and is consolidating today. Provided the 96.00 area holds, the next target is the year's high near 97.00. The euro has been confined to a little more than a quarter of a cent. Players seem reluctant to sell it below $1.14 and note there is a 570 mln euro option at $1.1420 that expires today.

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Tax System Problems Result in CHF 1.8bn Shortfall

2018-10-25

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2018-10-25

The Federal Tax Administration’s IT project Insieme was a financial disaster and its replacement isn’t much better, according to the Swiss Federal Audit Office (SFAO). Systems are unreliable and underperforming, with billions in tax demands still outstanding.

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Gloomy Signals for Euro Area Manufacturing

2018-10-25

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2018-10-25

Euro Area Composite PMI and GDP growth, 2003 - 2018
The euro area economy started the fourth quarter on a weak note; the flash composite PMI dipped to 52.7 in October from 54.1 in September. Both manufacturing and services showed a notable loss of momentum. A common feature in France and Germany was the weakness in manufacturing, where both countries posted similar declines.

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UBS Warns Trump’s Trade Fights Are ‘Reversing 15-Years Of Global Progress

2018-10-25

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2018-10-25

UBS Hard Brexit
Protectionism has cross-party support in the U.S., and nationalist parties continue to gain traction in Europe. Where there is inequality, there is a surge in protectionism; a risk that could trigger the next global economic crisis sometime around 2020.

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FX Daily, October 24: Disappointing Flash PMI Weighs on Euro

2018-10-24

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2018-10-24

The US dollar is firmer against the major currencies and most emerging market currencies.  While the seemingly fragile equity markets are still the center of investors' attention, the weakness of the eurozone flash PMI is disconcerting and has sent the euro closer to $1.14.  China's officials continue to unveil initiatives to minimize the disruption of the equity and debt markets while seemingly adding to moral hazard risks. 

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Mountain regions to benefit from digital push

2018-10-24

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2018-10-24

A campaign has been launched to promote digitalisation in small companies based in Swiss mountain regions. On Wednesday, the Federation of Adult Learning and Swiss Mountain Aid presented a project for companies with fewer than 50 employees to allow for training in internet technology.

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Monthly Macro Monitor – October 2018

2018-10-24

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2018-10-24

Economic Growth & Investment
Stocks have stumbled into October with the S&P 500 down about 6% as I write this. The source of equity investors’ angst is always hard to pinpoint and this is no exception but this correction doesn’t seem to be due to concerns about economic growth. At least not directly.

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Europe Challenged

2018-10-24

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2018-10-24

Europe is in an untenable position. It is being challenged on many fronts. A weaker euro need not result, but it is the path of least resistance. The economy has lost its momentum. What was first written off as a soft patch, now looks a bit more serious.

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