Tag Archives: 2) Swiss and European Macro

Falling momentum in new car sales, together with the threat of US tariffs is adding to the uncertainty facing the European car industry. The motor vehicle industry is of major importance to the EU economy and to global trade. According to Eurostat, total exports (to countries outside the EU) amounted to EUR205bn in 2017. Germany accounted for 52% of total motor exports. The US was the largest destination for EU motor...

L’histoire de la construction de l’Union européenne est avant tout une histoire d’endettement public. La preuve en un graphique: Le volume cumulée d’endettement de l’UE atteint en 2017 le chiffre respectable de 12, 46664 billions d’euros (à ne pas confondre avec le billion américain!). Cela revient à  un endettement cumulé de 12 466 640 000 000 euros, soit 12 trillions d’euros (référence de mesure US) Maintenant, la...

The number of registered unemployed in Switzerland dropped by 9% in May 2018 to a rate of 2.4%, down from 2.7% in April, according to a report by the State Secretariat for Economic Affairs (SECO). The rate in May 2018 was 22% lower than in May 2017. ©-Sculpies-_-Dreamstime.com_ - Click to enlarge Switzerland’s unemployment hasn’t been this low since 2008. In March 2018, SECO changed the way it calculates unemployment...

Neuchâtel, 11 June 2018 (FSO) -The Swiss nominal wage index rose by +0.4% on average in 2017 compared with 2016. It settled at 101.1 points (base 2015 = 100). Given an average annual inflation rate of +0.5%, real wages registered a decrease of -0.1% (101.0 points, base 2015 = 100) according to calculations by the Federal Statistical Office (FSO). Development of nominal wages to the consumer prices and real wages...

Junk Bond Spread Breakout The famous dead parrot is coming back to life… in an unexpected place. With its QE operations, which included inter alia corporate bonds, the ECB has managed to suppress credit spreads in Europe to truly ludicrous levels. From there, the effect propagated through arbitrage to other developed markets. And yes, this does “support the economy” – mainly by triggering an avalanche of capital...

Neuchâtel, 7 June 2018 (FSO) – The Swiss hotel industry registered 16.5 million overnight stays during the winter tourist season (November 2017 to April 2018), i.e. an increase of 4.6% (+724 000) compared with the same period of the previous year. With a total 8.7 million overnight stays, foreign demand grew by 5.6% (+460 000). Domestic demand rose by 3.5% (+264 000) reaching 7.8 million units. These are the provisional...

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...

The ECB has had essentially two options going into the June meeting: either a dovish decision but a hawkish communication (hinting at an imminent QE tapering), or a hawkish decision but a dovish communication (counterb alancing a tapering announcement with dovish sweeteners). Ever since economic indicators have started to deteriorate this year and risks to global trade have accumulated, ECB rhetoric has been...

This is not what we ordered! German factory orders collapsed in April, suggesting that the economic slowdown could extend into Q2. The underlying pace of domestic demand expansion looks more resilient. The main downside risks relate to net exports, in our view. Still, the most recent data releases have not been fully consistent with the ECB’s “hawkish moderation” scenario. A rebound in soft and hard data will be...

The Markit group that provides many of the PMI surveys noted with today’s reports that the eurozone outlook has “darkened dramatically.” This makes for a poor backdrop for the ECB, which meets next week. However, with price pressures recovering from the Easter-related distortions, the ECB is still on track to finish its asset purchases at the end of the year. This seems largely taken for granted. The real issue is when...