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Home / Tag Archives: 2) Swiss and European Macro

Tag Archives: 2) Swiss and European Macro

Swiss Trade Balance Q3 2019: exports still rising thanks to chemistry-pharma

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners. Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially...

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Swiss Producer and Import Price Index in September 2019: -2.0 percent YoY, -0,3 percent MoM

The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015 (see below), compared to -3% in Europe or -1% in...

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Switzerland Unemployment in September 2019: Unchanged at 2.1 percent, seasonally adjusted unchanged at 2.3 percent

Unemployment Rate (not seasonally adjusted) Registered unemployment in September 2019 – According to surveys by the State Secretariat for Economic Affairs (SECO), at the end of September 2019, 99’098 unemployed people were enrolled in the Regional Employment Centers (RAV), 454 less than in the previous month. The unemployment rate remained at 2.1% in the month under review. Compared with the same month of the previous year, unemployment fell by 7,488 people...

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Swiss Consumer Price Index in September 2019: +0.1 percent YoY, -0.1 percent MoM

02.10.2019 – The consumer price index (CPI) fell by 0.1% in September 2019 compared with the previous month, reaching 102.0 points (December 2015 = 100). Inflation was +0.1% compared with the same month of the previous year. These are the results of the Federal Statistical Office (FSO). The decrease of 0.1% compared with the previous month can be explained by several factors including falling prices for foreign package holidays and petrol. The prices of airfares and...

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Swiss Retail Sales, August 2019: +1.3 percent Nominal and -1.4 percent Real

01.10.2019 – Turnover adjusted for sales days and holidays rose in the retail sector by 1.3% in nominal terms in August 2019 compared with the previous year. Seasonally adjusted, nominal turnover fell by 1.6% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO). Real turnover adjusted for sales days and holidays fell in the retail sector by 1.4% in August 2019 compared with the previous year. Real growth takes...

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MMT, la nouvelle théorie en vogue à Washington

L’influence du ‘Modern Monetary Theory’ est susceptible d’augmenter dans les milieux économiques et politiques américains. La nouvelle théorie monétaire (Modern Monetary Theory/MMT), théorie macroéconomique défendue par des économistes hétérodoxes, commence à faire son chemin aux Etats-Unis. Cette théorie adopte une approche expérimentale de l’économie, basée sur la conviction fondamentale que la monnaie est créée par le gouvernement à travers les dépenses...

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Euro/USD: things look pretty stable

Competing forces mean the two currencies could remain in a holding pattern for a while. The euro has remained relatively stable relative to the US dollar in the wake of the European Central Bank (ECB) and US Federal Reserve (Fed) September policy meetings. Growth and interest rate differentials, two key drivers for the EUR/USD rate, suggest things could stay this way. The growth differential (based on leading indicators) has barely budged since March after a sharp...

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Swiss Trade Balance August 2019: the decline in exports continues

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners. Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade partners decided to spend more. This is partially...

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Powell plays the ‘insurance’ card again

In spite of internal divisions, the Fed may go for a third rate cut in October and step in to alleviate pressure in repo market. The Federal Reserve (Fed) cut rates by 0.25% on Wednesday, as widely anticipated. The new fed funds target range is 1.75%-2.00%. The interest rate on banks’ excess reserves was cut by 0.30% to 1.80%. Fed Chairman Jerome Powell again justified this second rate cut since July as “insurance” against risks to the US outlook – mostly the weak...

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Swiss Producer and Import Price Index in August 2019: -1.9 percent YoY, -0,2 percent MoM

The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015 (see below), compared to -3% in Europe or -1% in...

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