Tag Archives: 2) Swiss and European Macro

Neuchâtel, 5 October 2018 (FSO) – The consumer price index (CPI) increased by 0.1% in September 2018 compared with the previous month, reaching 101.9 points (December 2015 = 100). Inflation was 1.0% compared with the same month of the previous year. These are the results of the Federal Statistical Office (FSO). The 0.1% increase compared with the previous month can be explained by several factors including rising prices...

Short-term noise means we are neutral on the euro over the next three months, but see potential for its gradual appreciation against the dollar thereafter We have long argued that growth and interest rate differentials are two key components for the direction of the US dollar. Both these drivers should continue to support the dollar over the short term. Indeed, economic growth in the US is likely to be strong thanks...

More policy support is expected, and may lead to slight rebound in Q4. China’s manufacturing PMIs softened further in September, indicating that growth momentum is likely continued to moderate in Q3 and that the weakness may extend into Q4. In response to the weakening growth momentum, especially in the context of escalating trade tensions with the US, the Chinese government has turned to policy easing since June. The...

The populist government’s plans to increase the deficit could set it on a collision course with Brussels. We remain bearish Italian bonds and euro peripheral bonds in general. Leaders of Italy’s coalition government and the finance minister yesterday agreed on a 2.4% GDP deficit target. The new target is higher than our expectation of a deficit “above but close to 2.0%” in 2019. For us, the key issue is not so much the...

Neuchâtel, 1 October 2018 (FSO) – Turnover in the retail sector rose by 1.1% in nominal terms in August 2018 compared with the previous year. Seasonally adjusted, nominal turnover rose by 0.3% compared with the previous month. These are the provisional findings from the Federal Statistical Office (FSO). Real turnover in the retail sector also adjusted for sales days and holidays rose by 0.4% in August 2018 compared with...

Despite the recent fall in French consumer confidence, spending should pick up in the second half of the year. The French economy disappointed in the first half of this year. While there was a widespread ‘soft patch’ in the euro area, the source and size of the slowdown in France stands out. The real GDP growth rate fell by 0.5 points, much more than the rest of the euro area. Moreover, while the slowdown in the other...

Financial conditions remain supportive and are not expected to tighten much in the coming months. Lending to non-financial corporations in the euro grew by an annual 4.2% in August, its fastest rate since April 2009. Forward-looking indicators suggest that euro area credit growth should remain strong over the coming months. Overall, domestic demand is likely to continue to be the main driver of growth in the euro area,...

The services sector is proving resilient, but manufacturing disappoints. Euro area flash composite PMI dipped slightly to in September and came in slightly below consensus expectations. Activity in services picked up and weakened further in manufacturing, which continued its decline since the start of the year, falling to 53.3 in September from 54.6 in August. New export orders failed to grow for the first time since...

The Swiss National Bank has revised down its medium-term forecast for consumer inflation. We still expect a first SNB rate hike in September 2019. At the end of its quarterly monetary assessment meeting, the Swiss National Bank (SNB) left its main policy rates unchanged. Also unchanged from the last quarterly meeting in June was the central bank’s assessment of the Swiss franc as “high valued” and its characterisation...

Latest poverty figures provide government with an argument for fiscal stumulus. Severe material deprivation rates gauge the proportion of people whose living conditions are severely affected by a lack of resources. According to Eurostat, “it represents the proportion of people living in households that cannot afford at least four of the following nine items: mortgage or rent payments, utility bills, hire purchase...