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Tag Archives: 2) Swiss and European Macro

Swiss Producer and Import Price Index in November 2018: +1.4 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...

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EU Recession Imminent – Euro Disunion as Brexit, Italy and End of QE Loom

Someone asked recently how many times I had “crossed the pond” to Europe. I really don’t know. Certainly dozens of times. It’s been several times a year for as long as I remember. That makes me an extremely unusual American. Most of us never visit Europe, except maybe for a rare dream vacation. And that’s okay because our own country is wonderful and has a lifetime of sights to see. But it does affect our perspective on...

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‘Paris’ Technocrats Face Another Drop

How quickly things change. Only a few days ago, a fuel tax in France was blamed for widespread rioting. Today, Emmanuel Macron’s government under siege threatens to break its fiscal budget. Having given up on gasoline and diesel, the French government now promises wage increases and tax cuts. Italy has found competition in the race to violate EU fiscal guidelines. Around the rest of Europe, the question is being asked....

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ECB Preview: an end to net asset purchases

With the ECB’s asset purchases due to end this month and forward guidance set to remain unchanged, a focus at next week’s policy meeting will be staff forecasts for growth and inflation. At its Governing Council meeting next week, we expect the European Central Bank (ECB) to confirm that its asset purchases will cease at year’s end. However, it is likely to stress that the end of the net asset purchase programme does...

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Yellow vest protests cast cloud over Macron’s reform plans

Recent protests could have a negative impact on French growth, tax revenue and president Macron’s reform plans for his country and for Europe. French protests began on November 17 over hikes in fuel taxes, but have progressively broadened out into an expression of general anger with the French government about the cost of living and high taxes. To calm the situation, the government has dropped the planned fuel tax hike...

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Swiss Consumer Price Index in November 2018: +0.9 percent YoY, -0.3 percent MoM

04.12.2018 – The consumer price index (CPI) fell by 0.3% in November 2018 compared with the previous month, reaching 101.8 points (December 2015 = 100). Inflation was 0.9% compared with the same month of the previous year. These are the results of the Federal Statistical Office (FSO). The 0.3% drop compared with the previous month can be explained by several factors including falling prices for international package...

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Growth Contraction puts pressure on Italian Government

The downward revision to 3Q GDP will make the Italian government’s targets more difficult to achieve and complicate the budget debate with Europe. The Italian statistical office’s (ISTAT) final reading showed that the economy shrank 0.1% q-o-q (-0.5% q-o-q annualised) in Q3, whereas a preliminary reading on October 30 showed that growth was flat. The details were quite negative and confirmed the idiosyncrasy of the...

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Swiss Retail Sales, October 2018: +1.2 percent Nominal and +0.8 percent Real

03.12.2018 – Turnover in the retail sector rose by 1.2% in nominal terms in October 2018 compared with the previous year. Seasonally adjusted, nominal turnover rose by 1.9% 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 0.8% in October 2018 compared with the previous year....

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Surprise contraction in Swiss Q3 GDP

Switzerland’s growth unexpectedly contracted in the third quarter, pushing down our GDP growth forecast for 2018. Recent softening in the euro area also casts doubts about the pace of monetary tightening by the SNB. The strong growth enjoyed by the Swiss economy since Q1 2017 came suddenly to an end in Q3 18, when real GDP shrank unexpectedly by 0.2% q-o-q (-0.9% q-o-q annualised). This is much lower than consensus...

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Switzerland GDP Q3 2018: -0.2 percent QoQ, +2.4 percent YoY

Switzerland’s GDP fell by 0.2% in the 3rd quarter of 2018 due to both the industrial and service sectors. On the expenditure side, domestic demand and foreign trade had a negative impact. Switzerland’s GDP fell by 0.2% in the 3rd quarter of 2018, after climbing by 0.7% in the previous quarter. 1 The strong, continuous growth phase enjoyed by the Swiss economy for one and a half years was suddenly interrupted....

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