Perspectives Pictet

[unable to retrieve full-text content]ECB: Further easing could follow The ECB's latest easing package fell short of market expectations. However, the ECB may well act again during 2016.

Macroview Expected returns of traditional asset classes are reaching historical lows: equity valuations are stretched and negative bond yields are not unusual. Should investors be looking at hedge funds to enhance returns and diversify their portfolios? This has been one of the most disappointing years for hedge funds since 2008. A series of macro and idiosyncratic events – ranging from the ECB’s QE, to the Greek and Chinese crises, to the healthcare meltdown – created an unfavourable...

Today’s employment report coupled with yesterday’s downward move in the trade-weighted USD following ECB decisions has probably settled the case for a December hike. November’s employment report was healthy. Job creation came in above expectations, with upward revisions for the previous two months. The unemployment rate (stable at 5.0%) and wages (+0.2% m-o-m) were in line with consensus expectations. The Fed will most probably hike rates in December. Non-farm payroll employment rose by...

ISM surveys are not very reliable at forecasting GDP growth in the short run. Nevertheless, the figures look reasonably good, at least compared to what the hard falling headline numbers for November might suggest. Both ISM indices dropped markedly m-o-m in November. However, while the Manufacturing index fell to a new cycle-low, its Non-Manufacturing counterpart remained pitched at a still relatively robust level by past standards. Taken together, they point towards economic growth...

The easing package delivered by the ECB at its 3 December policy meeting fell short of market expectations. However, the new measures are still likely to boost the on-going recovery. The ECB’s President Mario Draghi was under a great deal of pressure not to disappoint today. In the end, the ECB delivered a policy package that was largely in line with our baseline, but fell short of (extremely high) expectations. However, we would not get carried away by short-term market disappointment....

[unable to retrieve full-text content]The Entrepreneurs, Barcelona Introducing the Pictet Entrepreneurs Summit, the annual invitation-only conference at the crossroad of serial entrepreneurship, personal wealth, and social responsibility.

In this edition of "The Entrepreneurs", we meet with Barcelona based entrepreneurs who speak about the unique edge of the city and their succesful ventures in the sectors of hospitality, leisure and design.

Given the persistent disinflationary pressures in China, monetary policy divergence lends itself to a gradual depreciation of the Chinese yuan against the greenback in 2016 towards 6.70 yuan per US dollar. On 30 November, the International Monetary Fund (IMF) officially decided to make the Chinese yuan (also called renminbi) the fifth sovereign currency in the Special Drawing Right (SDR), joining the US dollar, the euro, the British pound and the Japanese yen in this prestigious basket....

We expect Swiss real GDP growth to slightly pick up from an estimated 0.7% for 2015 to 1.1% in 2016. According to SECO’s estimate, Swiss real GDP stagnated q-o-q in Q3 (-0.1% q-o-q annualised; 0.8% y-o-y), below consensus expectations (0.2%). It came after GDP growth of 0.2% q-o-q in Q2 and a downwardly revised Q1 figure of -0.3% q-o-q. Although we cannot say that the Swiss economy is in a technical recession, it is worth highlighting that the economy is 0.1% below its level in Q4 2014...

Among its various options, we believe that the ECB would have to cut the deposit rate by at least 20bp to surprise the market. We have laid out our baseline scenario for this week’s ECB policy meeting, including a 10bp deposit rate cut, a 6-month QE extension and a possible broadening of the scope of asset purchases. Recent ECB rhetoric suggests that risks are tilted towards a more aggressive policy package. It would not be the first time that Mario Draghi over-delivers, although this time...