Tag Archives: 2) Swiss and European Macro

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...

19.04.2021 – In 2019, 73.9% of employees in Switzerland registered their working hours, whereas in the European Union (EU) only 58.1% did so. In European comparison, fixed working hours were less common in Switzerland (49.2%; EU: 60.1%) and more employed persons enjoyed a high level of job autonomy (60.4%; EU:  50.6%). In 2020, 18.2% of employed persons worked regularly on Saturdays and 9.3% regularly on Sundays. Teleworking from home increased considerably in 2020,...

M&A (mergers and acquisitions) activity is on the rise, as companies coming out of the pandemic with strong balance sheets shop for buying opportunities. Last week ACS, a Spanish construction group, approached Italian transport company Atlantia to buy Italy’s largest motorway network. Two big funds are also eyeing Dutch telecommunications company KPN as a potential acquisition target. M&A is one of our 2021 investment themes and we like event-driven hedge...

Asset Allocation We believe that robust earnings growth will overcome concerns about rate increases. Within a neutral position on developed-market equities, we believe sectoral rotation will continue and we remain overweight cyclical markets like the UK and Japan. But while we believe the attractiveness of stocks subject to wild valuation swings will fade, we continue to like cash-rich ‘structural grower’ stocks. The rise in the correlation between bonds and equities...

01.04.2021 – Turnover adjusted for sales days and holidays rose in the retail sector by 6.9% in nominal terms in February 2021 compared with the previous year. Seasonally adjusted, nominal turnover fell by 5.5% 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 6.3% in February 2021 compared with the previous year. Real growth...

01.04.2021 – The consumer price index (CPI) increased by 0.3% in March 2021 compared with the previous month, reaching 100.6 points (December 2020 = 100). Inflation was –0.2% compared with the same month of the previous year. These are the results of the Federal Statistical Office (FSO). The 0.3% increase compared with the previous month can be explained by several factors including rising prices for clothing and footwear due to the end of the seasonal sales. Heating...

30.03.2021 – At the end of 2020, more than one in ten Swiss citizens lived abroad. Almost two thirds lived in Europe, notably in France. Their number increased by 0.7% compared with 2019. The increase in the number of persons aged 65 and over was the most marked (+2.8%). Overall, the share of women remained greater than that of men, according to the results of the statistics on the Swiss abroad from the Federal Statistical Office (FSO). In 2020, 776 300 Swiss...

18.03.2021 – The Producer and Import Price Index remained unchanged in February 2021 compared with the previous month. The index stood at 100.3 points (December 2020 = 100). Petroleum products as well as basic metals and semi-finished metal products in particular saw higher prices, while pharmaceutical products became cheaper. Compared with February 2020, the price level of the whole range of domestic and imported products fell by 1.1%. These are the results of the...

Swiss foreign trade in salt has plummeted since 2010. Over the past ten years, exports have plunged 91% to 6,084 tonnes and imports by 69%. In 2019 and 2020, the amount of salt imported was greater than that exported, a phenomenon that had not occurred since 2009. In 2020, salt exports totaled 6,084 tonnes, one eleventh from their 2010 level, or down 91% over the decade. They had not reached such a low level since 1991. Imports, for their part, have plummeted by...

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...