Tag Archives: Macroview

Macroview Silver is usually referred in financial markets as ‘high-beta gold’ or the ‘poor man’s gold’. As such, the recent appreciation in silver prices is not surprising given the robust performance of gold. April 2016 was a good month for gold, with prices rising by +4.9% per ounce in US dollar terms. But it was a stellar month for silver, which rose by about 15.6%. Silver tends to be highly correlated to gold (the average 12-month rolling correlation since 1980 stands at 0.70), so...

The question of central bank credibility, and fixed-income investing when nominal yields are so low In the May issue of Perspectives, Pictet Wealth Management’s chief investment officer, César Pérez Ruiz, steps back to review the efforts of the world’s main central banks to boost the economy. The banks have introduced ever more radical measures, including negative interest rates and buying corporate as well as government bonds. But growth and inflation remain flaccid throughout the...

We retain our above-consensus forecast for the euro area this year, but weak first quarter leads to small cut in outlook for the US The conditions that we identified at the start of the year for a market rebound all subsequently fell into place: support from major central banks was forthcoming, the Chinese economy and the oil price stabilised, the US dollar bull trend paused, and systemic risk declined. Valuations have duly recovered. Now, banks need to start performing for markets to have...

In spite of the relatively weak headline jobs number, wage growth and household income figures were quite upbeat. We therefore maintain our forecast of 2.5% GDP growth for the second quarter. Read full article here April’s US employment report was mixed. Job creation was relatively soft and the unemployment rate remained stable for ‘bad’ reasons. However, in the current economic context, employment growth remains healthy overall. Wage numbers were relatively upbeat, and the proxy for...

ISM figures for April, together with robust auto sales, suggest some pick up in US growth during the month Read full report here The US ISM Manufacturing survey for April 2016, published on May 2, dropped back a little, from 51.8 in March to 50.8, below consensus expectations (51.4). However, the level recorded in March was an eight-month high. And the April figure is well above the lows registered at the turn of the year (48.0 in December 2015, 48.2 in January 2016). The New Orders...

As widely expected, core personal consumer expenditure (PCE) inflation dropped back slightly in March in the US, while wage increases remained subdued in Q1. We now expect that the Federal Open Market Committee (FOMC) will hike rates only once in 2016, probably in September. Read the full report here In Friday's report on income and consumption, data were also published on the PCE deflator, the price measure targeted by the Fed in gauging inflation. The core PCE price index (excluding...

The Q1 figure confirms our expectations of 1.8% growth this year, despite some clouds on the horizon Read the full report here Euro area GDP rose by 0.6% quarter on quarter (q-o-q) in Q1, in line with our above-consensus forecast. Evidence from high-frequency data suggests that domestic demand was the main engine of growth once again, supported by a strong rebound in both household consumption and corporate investment spending. We believe that momentum from this source still has legs:...

Macroview Growth continued to be dampened by a strong dollar, a collapse in oil sector investment and falling inventories, but prospects still relatively healthy Read the full report here US real GDP, buffeted by numerous headwinds and lacking momentum, grew by a feeble 0.5% in Q1 2016. Seasonality factors mean the first-quarter GDP growth rate can be very volatile, but Q1 growth was a clear disappointment overall, particularly as growth in Q4 2015 was already soft (+1.4% q-o-q...

Macroview Bank lending grew at a record pace in Q1, in spite of challenging environment for banks Read the full report here The expansion of bank credit to euro area non-financial corporations slowed in March, to EUR 1bn compared with a rise of EUR 24bn in January and EUR 19bn in February. By contrast, credit to households continued to increase at a decent pace in March and was slightly stronger than in previous months. Although credit flows eased in March, the three-month moving...

Macroview After hitting a low point at the end of 2015, fundamentals point to a rise in gold prices--but market conditions suggest the upside potential remains limited Read the full report here After the hefty gains made by gold this year, the attached Flash Note examines what might lie ahead for the precious metal by analysing the five key underlying drivers of gold prices: financial stress, inflation, real interest rates, the US dollar and supply and demand. Our conclusions are as...