Tag Archives: Macroview

Regarding US trade, there are two key recent pieces of news and one major source of uncertainty.The first is the bilateral trade deficit with China, which rose to a new high: USD 393 billion in the twelve months to July, with imports of USD 529 billion, according to US customs data. The second is that Trump’s focus is increasingly on the imports of consumer electronics, as he has recently threatened to cover a major consumer electronics brand (and importer) with levies. Bizarrely, electronics...

The revised figures mean a slight rise in our 2018 growth forecast. However, external uncertainties remain.The second estimate of the Japanese Q2 GDP coming in at 3.0% quarter-over-quarter annualised in Q2, a significant upward revision from the first estimate of 1.9%. This is Japan’s highest growth rate in nine quarters.The biggest revision was in corporate capital expenditure, which rose by 12.8% year over year (y-o-y) in Q2, according to the latest estimate. It contributed 1.7 percentage...

The latest headline Swiss GDP figures were impressive. According to the State Secretariat for Economic Affairs’ (SECO) quarterly estimates, Swiss real GDP grew by 0.7% q-o-q in Q2 (2.9% q-o-q annualised, 3.4% y-o-y), slightly above our 0.6% projection and consensus (0.5% q-o-q). This was the fifth consecutive quarter with an above average rate. Q1 GDP growth was significantly revised up to 1.0% q-o-q (from 0.6%). Thus,...

Fading policy headwinds has been helping growth numbers, but external factors are expected to weigh on growth in the near future.Indian GDP came in strongly in Q2, expanding 1.9% quarter-over-quarter and 8.2% year-over-year (y-o-y), beating both the consensus and our own forecast. These numbers put India easily at the top of G20 countries in terms of GDP growth. As a result, we are revising our Indian GDP forecast for fiscal year 25018-2019 slightly upwards to 7.6% from 7.5%.The acceleration...

Manufacturing and sports events served as boosts to growth, while domestic consumption was a letdown.The latest Swiss GDP figures were impressive. According to the State Secretariat for Economic Affairs’ quarterly estimates, Swiss real GDP grew by 0.7% q-o-q in Q2, slightly above our 0.6% projection and consensus. Average growth in the first half of 2018 was therefore the strongest since 2010. Nevertheless, GDP was again boosted by special factors, namely sports events, which added 0.2...

Pictet Wealth Management's latest positioning across asset classes and investment themes.Asset AllocationWe maintain our neutral stance on equities overall on a rolling three-to-six month basis. We do have a more upbeat assessment further out, but the autumn is shaping up to be a sensitive time for risk assets overall.Recent sell-offs validate our cautiousness regarding emerging-market (EM) assets in general. But valuations are becoming more interesting and we do have a bullish short-term...

The CIO office’s view of the week ahead.Politics and related events around the world continued to dominate headlines, distracting markets. In the US, clarity around the next tranche of tariffs on USD 200bn worth of Chinese imports failed to materialise as the Trump administration became preoccupied by a White House insider’s New York Times op-ed, which coincided with the imminent release of the latest tell-all book by journalist Bob Woodward. Meanwhile, in the run-up to Brazil’s potentially...

Wage growth and business cycle indicators are good news for current expansion.The August employment report confirmed that the US economy remains strong, still relatively isolated from the vagaries in global growth, and little affected by the ongoing trade tensions. This echoes recent data, such as the ISM manufacturing survey, which rose to the highest level since 2004. The unemployment rate was unchanged at 3.9%, just below the important 4% threshold. The highlight of the August report was...

Latest data suggests continued growth moderation in Q3. Our 2018 Chinese GDP forecast remains unchanged, but we see potential downside risk.In August, Purchasing Manager Indices (PMIs) sent mixed messages about the Chinese economy. Official PMIs compiled by the national bureau of Statistics and the China Federation of Logistics and Purchasing showed the market picking up slightly in August, while the Markit PMIs (also known as the Caixin PMIs) indicated further growth deceleration. Taking...

Declining manufacturing and services PMIs suggest negative GDP prospects.In addition to ongoing discussions around the 2019 Italian budget, GDP growth is one of the key variables to watch given its importance to debt dynamics. Recent surveys point to quite worrying signals. The Italian manufacturing PMI slipped to 50.1 in August from 51.5 in July, posting its second consecutive fall. The main driver of this decrease was new orders (-1.4 points to 48.7) and output (-0.9 points to 49.4). Both...