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Nadia Gharbi

Nadia Gharbi

Nadia Gharbi is economist at Pictet Wealth Management. She graduates in Université de Genève, Les Acacias, Canton of Geneva, Switzerland Do not hesitate to contact Pictet for an investment proposal. Do not hesitate to contact Pictet for an investment proposal. Please contact Zurich Office, the Geneva Office or one of 26 other offices world-wide.

Articles by Nadia Gharbi

Italian material deprivation rates still the worst among large euro area economies

1 day ago

Latest poverty figures provide government with an argument for fiscal stumulus.
Severe material deprivation rates gauge the proportion of people whose living conditions are severely affected by a lack of resources. According to Eurostat, “it represents the proportion of people living in households that cannot afford at least four of the following nine items: mortgage or rent payments, utility bills, hire purchase instalments or other loan payments; one week’s holiday away from home; a meal with chicken, fish or vegetarian equivalent every second day; a telephone (including mobile telephone); unexpected financial expenses; a colour TV; a washing machine; a car; and heating to keep the home adequately warm”. The rate

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Business indicators present a contrasting picture of the euro area

2 days ago

The services sector is proving resilient, but manufacturing disappoints.Euro area flash composite PMI dipped slightly in September, coming in slightly below consensus expectations. Activity in services picked up and weakened further in manufacturing, which continued its decline since the start of the year, falling to 53.3 in September from 54.6 in August. New export orders failed to grow for the first time since June 2013.Overall, euro area composite PMI remains consistent with our forecast of 2% GDP growth in 2018. But growth outside of Germany and France improved only marginally from August’s 22-month low, rounding off the worst quarter for business sentiment in the euro area in two years.In Germany, the PMI survey showed a strong divergence between services and manufacturing in

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Italian material deprivation rates still the worst among large euro area economies

2 days ago

Latest poverty figures provide government with an argument for fiscal stumulus.Severe material deprivation rates gauge the proportion of people whose living conditions are severely affected by a lack of resources. According to Eurostat, “it represents the proportion of people living in households that cannot afford at least four of the following nine items: mortgage or rent payments, utility bills, hire purchase instalments or other loan payments; one week’s holiday away from home; a meal with chicken, fish or vegetarian equivalent every second day; a telephone (including mobile telephone); unexpected financial expenses; a colour TV; a washing machine; a car; and heating to keep the home adequately warm”. The rate varies significantly from country to country. Italy has the highest severe

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Cut to Swiss inflation forecast

3 days ago

The Swiss National Bank has revised down its medium-term forecast for consumer inflation. We still expect a first SNB rate hike in September 2019.At the end of its quarterly monetary assessment meeting, the Swiss National Bank (SNB) left its main policy rates unchanged. Also unchanged from the last quarterly meeting in June was the central bank’s assessment of the Swiss franc as “high valued” and its characterisation of the situation on foreign exchange as “fragile”. The SNB emphasized that the Swiss franc had appreciated noticeably against major currency as well as against emerging currencies, and reiterated that it was willing to intervene in the foreign exchange market in order to keep the value of the Swiss franc in check.The SNB acknowledged the dynamism of Swiss growth in 2018. It

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European labour market remains in rude health

8 days ago

But there is room for further improvement.
This week euro area employment data confirmed that labour market recovery remains on track. Employment grew at 0.4% q-o-q in Q2 2018, marking the 20th consecutive quarter of expansion. Employment is now 2.4% above its pre-crisis (2008) level. Since Q2 2013, 9.2 million jobs have been created in the euro area. One development of note is that employment growth has been broad, including many countries that were hard hit by the crisis. Spain and Germany have contributed to approximately 50% of the total increase in euro area employment.
Employment is a lagging indicator. Nevertheless, leading indicators such as the employment component in the Markit PMI surveys suggest that

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European labour market remains in rude health

9 days ago

But there is room for further improvement.This week euro area employment data confirmed that labour market recovery remains on track. Employment grew at 0.4% q-o-q in Q2 2018, marking the 20th consecutive quarter of expansion. Employment is now 2.4% above its pre-crisis (2008) level. Since Q2 2013, 9.2 million jobs have been created in the euro area. One development of note is that employment growth has been broad, including many countries that were hard hit by the crisis. Spain and Germany have contributed to approximately 50% of the total increase in euro area employment.Employment is a lagging indicator. Nevertheless, leading indicators such as the employment component in the Markit PMI surveys suggest that despite the euro area growth slowdown in the first half of the year, job

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Switzerland Q2 growth numbers are impressive, but details are mixed

11 days ago

The latest headline Swiss GDP figures were impressive. According to the State Secretariat for Economic Affairs’ (SECO) quarterly estimates, Swiss real GDP grew by 0.7% q-o-q in Q2 (2.9% q-o-q annualised, 3.4% y-o-y), slightly above our 0.6% projection and consensus (0.5% q-o-q). This was the fifth consecutive quarter with an above average rate. Q1 GDP growth was significantly revised up to 1.0% q-o-q (from 0.6%). Thus, average growth in the first half of 2018 was the strongest since 2010.
Nevertheless, the devil is in the details. First, GDP was again boosted by special factors, namely sports events, which added 0.2 percentage points (pp) to quarterly growth in both Q1 and Q2 (see Chart 1). Second, domestic demand,

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Switzerland Q2 growth numbers are impressive, but details are mixed

12 days ago

Manufacturing and sports events served as boosts to growth, while domestic consumption was a letdown.The latest Swiss GDP figures were impressive. According to the State Secretariat for Economic Affairs’ quarterly estimates, Swiss real GDP grew by 0.7% q-o-q in Q2, slightly above our 0.6% projection and consensus. Average growth in the first half of 2018 was therefore the strongest since 2010. Nevertheless, GDP was again boosted by special factors, namely sports events, which added 0.2 percentage points to quarterly growth in both Q1 and Q2. Second, domestic demand and imports were on the weak side in Q2, with private consumption growth slowing. Regarding trade, exports enjoyed a robust growth, while imports contracted. Manufacturing sectors provided the most substantial boost to growth

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Italian surveys show worrying weakness

16 days ago

Declining manufacturing and services PMIs suggest negative GDP prospects.In addition to ongoing discussions around the 2019 Italian budget, GDP growth is one of the key variables to watch given its importance to debt dynamics. Recent surveys point to quite worrying signals. The Italian manufacturing PMI slipped to 50.1 in August from 51.5 in July, posting its second consecutive fall. The main driver of this decrease was new orders (-1.4 points to 48.7) and output (-0.9 points to 49.4). Both indicators moved back into contraction territory. Firms cited weakness in the domestic economy as one of the reasons for the slowdown. “Concerns over future global trading conditions, particularly in relation to the US, also undermined confidence in August, with expectations amongst manufacturers for

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Italian 2019 draft budget: a bumpy road ahead

23 days ago

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.
In this contract, the governing coalition, made up of the Five Start Movement (M5S) and the League, committed to a significant degree of fiscal easing via measures such as a flat tax and a partial roll-back of the 2011 Fornero pension reform, as well as a kind of universal basic  income. These measures, if fully implemented, would likely

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Italian 2019 draft budget: a bumpy road ahead

24 days ago

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.In this contract, the governing coalition, made up of the Five Star Movement (M5S) and the League, committed to a significant degree of fiscal easing via measures such as a flat tax and a partial roll-back of the 2011 Fornero pension reform, as well as a kind of universal basic  income. These measures, if fully implemented, would likely prove very costly and thereby derail Italy’s debt dynamics (according to an

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Europe chart of the week – Swiss franc

August 17, 2018

Recent foreign exchange movements pave the way for a cautious SNB monetary policy.In April, the EUR/CHF rate (1 euro in Swiss franc) hit its highest level since the Swiss National Bank (SNB) decided to lift its exchange rate floor in January 2015. Since then, the Swiss franc has appreciated by 5.8% against the euro, mainly driven by political uncertainty in Italy and concerns that Turkey’s economic troubles could impact European banks.Movements in the foreign exchange (FX) markets are scrutinised by the SNB. Recent developments tend to confirm the SNB’s view that the “situation in FX markets remains fragile”, and thus reinforce its conviction to maintain its ultra-loose monetary stance (via its two pillars strategy, namely negative interest rate and intervention in the FX markets when

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Revising our euro area 2018 GDP growth forecast down

August 1, 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 (0.346% q-o-q unrounded, 1.4% q-o-q annualised, 2.1% y-o-y), below consensus expectations (0.4%). This was the weakest growth in two years and comes after a GDP growth of 0.4% q-o-q in Q1. The carryover effect for 2018 reached 1.7 %, meaning that even with zero growth in the remainder of 2018, euro area GDP would grow by 1.7% on average this year. The breakdown of euro are a growth by expenditure components will be published on 7 September. Based on high-frequency data and some country-specific releases, domestic demand was again the main driver

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Revising our euro area 2018 GDP growth forecast down

July 31, 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. We now expect euro area real GDP to grow by 2.0% on average this year (down from our previous forecast of 2.3% for 2018).Euro area economic activity was buoyant in 2017. While a slowdown this year was expected, its magnitude has surprised. Several one-off factors are seen as having hurt growth data. But the loss of economic momentum is also the result of more persistent

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French Q2 GDP growth marks time

July 29, 2018

A number of one-off factors hurt growth dynamics, but there are many reasons to think that expansion will pick up in the rest of this year.
France is the first country in the euro area to publish Q2 GDP figures. The economy expanded by 0.2% q-o-q in Q2, the same pace as the previous quarter and below consensus expectations of 0.3%.
The key source of disappointment was private consumption, which was hit by one-off factors such as unseasonal weather and transport strikes. More positively, investment accelerated sharply, thanks largely to a surge in corporate investment.
Carryover effects mean that even with zero growth in the remaining two quarters of 2018, French GDP would grow by 1.3% on average this year. Given

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Ceasefire in US/EU tariff dispute

July 28, 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. Importantly, Trump agreed to put his threat of tariffs on EU cars on hold as bilateral trade talks continue, and to re-examine the tariffs recently imposed on steel and aluminium imports from the EU. Both leaders said they would work towards zero trade tariffs between the EU and the US, zero non-tariff barriers and zero subsidies on non-auto goods, as well as lower barriers on trade in

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Ceasefire in US/EU tariff dispute

July 28, 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. Importantly, Trump agreed to put his threat of tariffs on EU cars on hold as bilateral trade talks continue, and to re-examine the tariffs recently imposed on steel and aluminium imports from the EU. Both leaders said they would work towards zero trade tariffs between the EU and the US, zero non-tariff barriers and zero subsidies on non-auto goods, as well as lower barriers on trade in

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French Q2 GDP growth marks time

July 27, 2018

A number of one-off factors hurt growth dynamics, but there are many reasons to think that expansion will pick up in the rest of this year.France is the first country in the euro area to publish Q2 GDP figures. The economy expanded by 0.2% q-o-q in Q2, the same pace as the previous quarter and below consensus expectations of 0.3%.The key source of disappointment was private consumption, which was hit by one-off factors such as unseasonal weather and transport strikes. More positively, investment accelerated sharply, thanks largely to a surge in corporate investment.Carryover effects mean that even with zero growth in the remaining two quarters of 2018, French GDP would grow by 1.3% on average this year. Given the recent stabilisation in business surveys, the end of rail transport strikes

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Message from the ECB: Enjoy summer!

July 27, 2018

Today’s Governing Council meeting did little to break the seasonal torpor. We continue to expect its first rate hike to come in September 2019.
There was no change in interest rates or forward guidance at today’s ECB Governing Council meeting.
The Governing Council reaffirmed that bond purchases will end in December and that key interest rates are expected to remain at their present levels “at least through the summer of 2019”.
The ECB said it remained confident about the euro area’s economic outlook and still saw risks to growth as “broadly balanced”.
Trade tensions and the ECB’s bond-reinvestment strategy were the main focus of an unusually short Q&A session.
Overall, there was no significant surprise from today’s

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Message from the ECB: Enjoy summer!

July 26, 2018

Today’s Governing Council meeting did little to break the seasonal torpor. We continue to expect its first rate hike to come in September 2019.There was no change in interest rates or forward guidance at today’s ECB Governing Council meeting.The Governing Council reaffirmed that bond purchases will end in December and that key interest rates are expected to remain at their present levels “at least through the summer of 2019”.The ECB said it remained confident about the euro area’s economic outlook and still saw risks to growth as “broadly balanced”.Trade tensions and the ECB’s bond-reinvestment strategy were the main focus of an unusually short Q&A session.Overall, there was no significant surprise from today’s press conference. As such, we remain comfortable with our forecast of a first

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Euro Area Lending Dynamics in Good Shape

July 25, 2018

Rising bank credit flows confirm that domestic fundamentals remain solid across most of the euro area.
The ECB’s M3 and credit report for June just published confirms that lending dynamics continue to be in a good shape in the euro area, boding well for private investment. Bank credit flows to non-financial corporations (adjusted for seasonal effects and securitisations) amounted to €10bn in June, down from €25bn in May. Corporate-sector lending increased 4.1% year-over-year in June, its fastest rate since May 2009. On a country-by-country basis, flows were positive in Germany, France and Spain, but negative in Italy. Bank credit flows to euro area households rose strongly again in June, extending their upward trend.

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Euro area lending dynamics in good shape

July 25, 2018

Rising bank credit flows confirm that domestic fundamentals remain solid across most of the euro area.The ECB’s M3 and credit report for June just published confirms that lending dynamics continue to be in a good shape in the euro area, boding well for private investment. Bank credit flows to non-financial corporations (adjusted for seasonal effects and securitisations) amounted to €10bn in June, down from €25bn in May. Corporate-sector lending increased 4.1% year-over-year in June, its fastest rate since May 2009. On a country-by-country basis, flows were positive in Germany, France and Spain, but negative in Italy. Bank credit flows to euro area households rose strongly again in June, extending their upward trend. Forward-looking indicators suggest that credit growth should continue

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Euro area PMIs on the soft side

July 24, 2018

Fundamentals remain solid but the decline in some forward-looking indicators in July signal downside risk in the coming months.Markit’s euro area flash PMI surveys for July came in on the soft side. The composite PMI for the euro area fell to 54.3 in July from 54.9 in June, below consensus expectations. At the sector level, the manufacturing PMI index rose marginally, putting a halt to six consecutive months of decline.The services PMI declined to 54.4, but this followed a 1.4 points jump last month to 55.8. The details were somewhat mixed. The rise in manufacturing was mainly due to stronger output growth, while new orders and export orders growth slowed, with the latter reaching a 27-month low. Job creation remained strong by historical standards. Finally, input price inflation

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Euro area PMIs on the soft side

July 24, 2018

Fundamentals remain solid but the decline in some forward-looking indicators in July signal downside risk in the coming months.
Markit’s euro area flash PMI surveys for July came in on the soft side. The composite PMI for the euro area fell to 54.3 in July from 54.9 in June, below consensus expectations. At the sector level, the manufacturing PMI index rose marginally, putting a halt to six consecutive months of decline.
The services PMI declined to 54.4, but this followed a 1.4 points jump last month to 55.8. The details were somewhat mixed. The rise in manufacturing was mainly due to stronger output growth, while new orders and export orders growth slowed, with the latter reaching a 27-month low. Job creation

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Services dent euro area core inflation in June, but no reason to panic

July 20, 2018

We expect core inflation to rise gradually later this year.The final reading for headline inflation in the euro area (HICP) was confirmed at 2.0% y-o-y in June (up from 1.9% in May), reflecting higher energy price inflation. This is the highest rate of inflation since February 2017.However, core inflation (HICP ex-energy, food, alcohol and tobacco) was revised down to 0.95% y-o-y, (rounded down to 0.9%) from a flash estimate of 0.97%. By comparison, core inflation in May was 1.13% y-o-y. The fall in core inflation was mainly due to distortions in service prices caused by the timing of Easter.That being said, we expect headline inflation to remain close to 2% for most of the rest of the year while we expect core inflation to hover around 1% before stronger base effects and a narrowing of

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Europe chart of the week – UK GDP growth

July 13, 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 economy) grew by 0.3% in the three months to end-May and was the only positive contributor to GDP growth. Services enjoyed a boost from temporary factors such as the warm weather and the royal weeding. By contrast, industrial production (14% of the economy) and construction

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Europe chart of the week – UK GDP growth

July 13, 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 economy) grew by 0.3% in the three months to end-May and was the only positive contributor to GDP growth. Services enjoyed a boost from temporary factors such as the warm weather and the royal weeding. By contrast, industrial production (14% of the economy) and construction (6% of the economy) detracted from GDP growth.The recent data releases,

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Euro area: a slight rebound

July 8, 2018

Overall, June saw a halt to recent declines in euro area business sentiment survey.
The final reading for the euro area composite Purchasing Managers’ Index (PMI) rose from 54.1 in May to 54.9 in June, slightly higher than the initial estimate of 54.8. However, the manufacturing PMI fell further, to an 18-month low of 54.9, due to weakness in France and Germany. Growth remains decent in the sector but, as Markit noted, the decline in business optimism “reflects rising trade worries, political uncertainty and the impact on ongoing capacity constraints”. On a brighter note, the services PMI jumped to 55.2 from 53.8 in May, boosted by strong data in Germany, France and Italy.
The robust headline PMI in June was partly

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Euro area: a slight rebound

July 6, 2018

Overall, June saw a halt to recent declines in euro area business sentiment survey.The final reading for the euro area composite Purchasing Managers’ Index (PMI) rose from 54.1 in May to 54.9 in June, slightly higher than the initial estimate of 54.8. However, the manufacturing PMI fell further, to an 18-month low of 54.9, due to weakness in France and Germany. Growth remains decent in the sector but, as Markit noted, the decline in business optimism “reflects rising trade worries, political uncertainty and the impact on ongoing capacity constraints”. On a brighter note, the services PMI jumped to 55.2 from 53.8 in May, boosted by strong data in Germany, France and Italy.The robust headline PMI in June was partly due to calendar effects. Markit noted that the number of holidays was

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Europe chart of the week – Bank credit flows

June 29, 2018

ECB’s M3 and credit report for May showed a large rebound in long-term bank loans to corporates.The ECB’s M3 and credit report for May published this week was pretty strong overall and confirmed that lending dynamics in the euro area are in good shape. Bank credit flows to non-financial corporations (NFC, adjusted for seasonal effects and securitisations) amounted to €22bn in May, much more than the April figure of €11bn. Corporate-sector lending increased 3.6% year-over-year in May, its fastest rate since May 2009 and up from 3.3% in April.One factor that could partly explain the rebound is the lower issuance activity after the surge seen in Q1. On a country-by-country basis, the rebound was particularly strong in Germany (+€8bn) and in France (+€7bn). Flows to NFC were also positive

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