Perspectives Pictet

We remain constructive on gold, but some other precious metals face issues stemming from a moderate slowdown in global growth and changes in the auto industry.While gold prices have risen about 12% per troy ounce since the beginning of this year, we still have a constructive view of the gold price over the next 12 to 18 months. But does this mean that the outlook for precious metals in general is positive?Notwithstanding fluctuations in the US dollar, gold has generally benefited from a low...

US business sentiment is solid, yet bank lending remains muted, making us cautious about the outlook for investment growth.US business activity seems to be continuing apace and all forward-looking indicators, in particular sentiment surveys, are flashing green. But there is an important blemish in this otherwise rosy picture: bank lending has been soft, and recent data is not showing any signs of an uptick. In September, commercial and industrial (C&I) bank lending was up 2.0% y-o-y,...

Q3 growth figures were in line with our expectations and confirmed ongoing changes in the structure of the Chinese economy. Our forecast for Chinese GDP growth remains unchanged.Chinese GDP for Q3 2017 came in at Rmb21.2 trillion (USD3.2 trillion), growing by 6.8% y-o-y in real terms, slightly below the pace of expansion in the first half of the year (6.9%).Several points are worth highlighting.First, China’s economic transition is well underway. The tertiary sector, mainly services,...

Recent signals suggest that the ECB is likely to announce next week the extension its asset purchases for nine months, at a reduced pace of EUR30bn. We expect corporate bonds to form a bigger part of total purchases.Recent ECB communication has been remarkably consistent in signalling a ‘slower for longer’ QE extension into 2018. In light of these signals, we expect the ECB to announce at its 26 October meeting that asset purchases will be extended for nine months, until at least September...

Through its asset purchase programme, the Bank of Japan owns 4% of the TOPIX’s market capitalisation and two-thirds of Japanese equity ETFs.Although it has made no major monetary policy announcement since September 2016, the Bank of Japan (BoJ) has actually been tapering its government bond purchases ever since. As a result, equity ETF purchases have steadily increased over the past year from 3% of total BoJ purchases to 9% recently, above the initial implicit target of 7%.The central bank...

There are increasing chances that Madrid will impose direct rule on Catalonia. A prolonged stand-off could end up depressing activity, but for now we are not revising our growth outlook for Spain.This morning, the Catalan president failed to answer clearly whether Catalonia had declared independence or not. He reiterated that he had placed last week’s unilateral declaration of independence on hold in order to open up a “two-month process” to try to reach a deal with the central...

Renewed political risks are leading to very limited repricing of the sovereign risk premiums.A Catalan crisis, a Dutch eurosceptic-leaning government coalition, the return of Austrian populists, difficult German coalition talks… Eurosceptics have had plenty of opportunities to make a comeback, and yet the market continues to trade each event as largely idiosyncratic in nature.Explanations abound for the resilience of peripheral markets to political risks, including a stronger and broad-based...

Macronomics could well accelerate the closing of the growth gap with Germany and improve the outlook for French equities.The first major piece of President Emmanuel Macron’s agenda, the business- friendly labour market reform, was signed into law last month. Some Macron measures may have adverse effects in the short term and some others are not fully financed and difficult to quantify, but overall they should boost purchasing power, investment and productivity. The government has been...

While US oil production continues to grow, the increase in oil sales to China could help moderate Trump administration invectives against China.The ‘revolution’ in tight oil production means that US oil production is about to break the annual record of 9.6 million barrels per day (mb/d) reached in 1970. Under rising pressure from oil producers, the Obama administration significantly loosened rules on crude oil exports, which have boomed. But where is all this oil going?China has accounted...

[embedded content] Published: Wednesday October 11 2017The 4th Pictet Entrepreneurs Summit held in Geneva in September 2017 brought together an exclusive group of 60 entrepreneurs and investors with a passion for innovation. On day one the focus was on the future of cities, food, agriculture, health and living in a secure world, while on day two the discussions centred on the topics of success, personal wealth and responsibility.