Tag Archives: 2) Swiss and European Macro

Switzerland’s GDP rose by 0.3% in the 2nd quarter of 2019, after increasing by 0.4% (revised) in the previous quarter.1 The development of domestic and foreign demand was weak, as in other European countries, which had a particularly negative impact on the service sectors. Switzerland Gross Domestic Product (GDP) QoQ, Q2 2019(see more posts on Switzerland Gross Domestic Product, ) Source: Investing.com - Click to enlarge Switzerland’s GDP rose by 0.3% in the...

02.09.2019 – Turnover in the retail sector rose by 1.5% in nominal terms in July 2019 compared with the previous year. Seasonally adjusted, nominal turnover rose by 0.1% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO). Real turnover in the retail sector also adjusted for sales days and holidays rose by 1.4% in July 2019 compared with the previous year. Real growth takes inflation into consideration. Compared...

03.09.2019 – The consumer price index (CPI) remained stable in August 2019 compared with the previous month, reaching 102.1 points (December 2015 = 100). Inflation was +0.3% compared with the same month of the previous year. These are the results of the Federal Statistical Office (FSO).The stability of the index compared with the previous month is the result of opposing trends that counterbalanced each other overall. Airfares as well as prices for international...

20.08.2019 – The number of employed persons in Switzerland rose by 1.1% between the 2nd quarter 2018 and the 2nd quarter 2019. During the same period, the unemployment rate as defined by the International Labour Organisation (ILO) fell from 4.6% to 4.2%. The EU unemployment rate based on the ILO definition decreased from 6.8% to 6.3%. These are some of the results from the Swiss Labour Force Survey (SLFS). Download press release: 2nd quarter 2019: number of persons...

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...

Yields have fallen significantly in the EM sovereign bond space in local currency; USD movements will be key to watch for going forward. Yields have fallen impressively in the emerging market (EM) sovereign bond space in local currency, reaching 5.3% on 16 August, near their all-time low of 5.2% (in May 2013). This downward movement has been partly driven by the recent policy rate cuts of some EM central banks. The stabilisation of inflationary pressures thanks to a...

Recent developments in Italy’s political landscape have increased the probability of early elections in Q4 2019, but the situation is not so straightforward. Last week, political tensions in Italy intensified as Matteo Salvini, the League’s leader triggered a no confidence vote against Prime Minister Giuseppe Conte. PM Conte will address the Senate on 20 August. A confidence vote will likely follow the speech, though further delays remain a possibility. Once the...

As central banks try (yet again) to bolster faltering growth and inflation, it is important to grasp how the ‘style’ and aims of monetary policy-making have changed over time and how they need to evolve in the future. The world is being disrupted by structural trends such as populism, demographic and climate change and technological innovation. Likewise, with previous approaches producing fewer results, we believe it is time to envisage monetary policies that address...

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...

05.08.2019 – Turnover in the retail sector rose by 0.7% in nominal terms in June 2019 compared with the previous year. Seasonally adjusted, nominal turnover rose by 1.4% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO). Real turnover in the retail sector also adjusted for sales days and holidays rose by 0.7% in June 2019 compared with the previous year. Real...