Perspectives Pictet

Having set out our expectations for the global economy in 2018, we add here a number of potential surprises. None of them are included in our baseline projections.In the US, we include first a ‘Texas boom’ due to rising oil prices. US oil investment could see a major uptick and Texas could accelerate, in turn lifting US growth.Secondly, we include a hawkish shift at the Fed. While Trump has preferred continuity in the Fed’s leadership with his nominee as Fed Chair, Jerome Powell, he could...

The most important driver of the Swiss watch industry’s recovery has been the revival of the mainland China market.After years of impressive growth, the Swiss watch industry faced difficult conditions in 2015 and 2016, when exports declined by 3.2% and 9.9% respectively in value terms. The last time that there were two consecutive years of decline was in 1995-96. The appreciation of the Swiss franc, the collapse of the top market Hong Kong due to the sudden disappearance of Chinese tourists...

We expect the ECB to announce a tapering of its asset purchase programme in the summer, but not to overreact to strong economic data.Our first choice as the title for our 2018 ECB outlook was “The courage not to act”, but regular readers will know that we used this hommage to Ben Bernanke earlier this year. Yet our faith in ECB’s courage knows no bounds and this still feels relevant today, with the caveat that the ECB will act in 2018, announcing a tapering of its asset purchase programme in...

The US is about to enact significant corporate tax cuts, and could therefore edge closer to the number 1 spot in the World Economic Forum’s ranking – currently held by Switzerland.The US is about to enact significant corporate tax cuts, that will see the federal statutory corporate tax rate drop to 21%, from 35%, starting in January (see our latest note ‘US tax cuts update – 19 December 2017’).This will significantly increase the global competitiveness of the US economy, especially as high...

The 21% corporate tax rate could cause 2018 expected earnings growth for US stocks to more than double. We see some upside risk to our US equity scenario.Last night, the US Senate approved the tax bill. It has since returned to the House of Representatives for administrative reasons, but, in line with an earlier vote, a green light looks now highly likely. Shortly thereafter, President Trump should sign it formally into law. If the tax reform is adopted, the statutory tax rate is expected to...

The tax bill continues to make its way through Congress at a swift pace, and now looks increasingly likely to be enacted into law this week.The Republican leadership seems to have corralled enough support to pass the tax bill approved in conference committee. The bill could be signed into law as soon as this week.The tax bill cuts the corporate tax rate to 21% from 35%, from January 2018. Global corporate taxation will move to a territorial regime, with a one-off tax on foreign investments...

[embedded content] The fourth edition of the Asian Family Office Master Class took place in Singapore in November 2017, with about 70 guests attending. The focus was around the three pillars of Pictet’s Family Office offer: family governance, investment governance and operational governance. Among the speakers, we had the pleasure of welcoming José Leyte, Chief Executive Officer of one of the biggest European Family Office in terms of asset under management; Kelly Poon, Partner at Atomico,...

The fourth edition of the Asian Family Office Master Class took place in Singapore in November 2017, with about 70 guests attending. The focus was around the three pillars of Pictet’s Family Office offer: family governance, investment governance and operational governance. Among the speakers, we had the pleasure of welcoming José Leyte, Chief Executive Officer of one of the biggest European Family Office in terms of asset under management; Kelly Poon, Partner at Atomico, an innovative...

Euro area GDP growth and inflation forecasts have been revised up, reflecting growing confidence over the macro outlook.During an uneventful ECB press conference on Thursday, attention centred on the new staff projections. The headline projections were in line with expectations, albeit slightly higher on GDP growth and lower on inflation.The key word was “confidence”- in a strong expansion leading to a “significant” reduction in economic slack, as well as in the ECB’s capacity to meet its...

The latest flash purchasing managers index surveys showed robust momentum for the euro area. We maintain our GDP growth forecast of 2.3% for 2017.Flash purchasing managers’ indices (PMIs) for the euro area ended the year on a strong note. The composite PMI increased to 58.0 in December, from 57.5 in November, above consensus expectations (57.2).The robust momentum was led by a booming manufacturing sector, while services sentiment also improved.The breakdown by sub-indices was pretty strong,...