Tag Archives: Macroview

The most important driver of the Swiss watch industry’s recovery has been the revival of the mainland China market. After years of impressive growth, the Swiss watch industry faced difficult conditions in 2015 and 2016, when exports declined by 3.2% and 9.9% respectively in value terms. The last time that there were two consecutive years of decline was in 1995-96. The appreciation of the Swiss franc, the collapse of...

The BoJ remains the last major central bank still firmly committed to large-scale monetary easing.After its Monetary Policy Meeting of December 21, the Bank of Japan (BoJ) announced its intention to keep its current monetary easing programme intact. The BOJ will continue with its “Quantitative and Qualitative Monetary Easing with Yield Curve Control ”, aiming to achieve and overshoot the core inflation target of 2%.The reason for the BoJ deciding to stay put is the stubbornly low inflation...

The US is about to enact significant corporate tax cuts, and could therefore edge closer to the number 1 spot in the World Economic Forum’s ranking – currently held by Switzerland. The US is about to enact significant corporate tax cuts, that will see the federal statutory corporate tax rate drop to 21%, from 35%, starting in January (see our latest note ‘US tax cuts update – 19 December 2017’). This will significantly...

The tax bill continues to make its way through Congress at a swift pace, and now looks increasingly likely to be enacted into law this week, after clearing the conference committee hurdle (a compromise between the House and Senate versions). A few hesitating Republican Senators have eventually said they will vote in favour of the bill, which is key as the Republican majority in the Senate is slim at 52-48. It will...

At its December meeting, the Swiss National Bank (SNB) left its accommodative monetary policy unchanged. More specifically, the SNB maintained the target range for the three-month Libor at between – 1.25% and-0.25% and the interest rate on sight deposits at a record low of – 0.75%. The SNB also reiterated its commitment to intervene in the foreign exchange market if needed, taking into account the “overall currency...

Having set out our expectations for the global economy in 2018, we add here a number of potential surprises. None of them are included in our baseline projections.In the US, we include first a ‘Texas boom’ due to rising oil prices. US oil investment could see a major uptick and Texas could accelerate, in turn lifting US growth.Secondly, we include a hawkish shift at the Fed. While Trump has preferred continuity in the Fed’s leadership with his nominee as Fed Chair, Jerome Powell, he could...

During an uneventful ECB press conference on Thursday, attention centred on the new staff projections. The headline projections were in line with expectations, albeit slightly higher on GDP growth and lower on inflation. The key word was “confidence” – in a strong expansion leading to a “significant” reduction in economic slack, as well as in the ECB’s capacity to meet its mandate. That said, ECB President Mario Draghi...

The most important driver of the Swiss watch industry’s recovery has been the revival of the mainland China market.After years of impressive growth, the Swiss watch industry faced difficult conditions in 2015 and 2016, when exports declined by 3.2% and 9.9% respectively in value terms. The last time that there were two consecutive years of decline was in 1995-96. The appreciation of the Swiss franc, the collapse of the top market Hong Kong due to the sudden disappearance of Chinese tourists...

We expect the ECB to announce a tapering of its asset purchase programme in the summer, but not to overreact to strong economic data.Our first choice as the title for our 2018 ECB outlook was “The courage not to act”, but regular readers will know that we used this hommage to Ben Bernanke earlier this year. Yet our faith in ECB’s courage knows no bounds and this still feels relevant today, with the caveat that the ECB will act in 2018, announcing a tapering of its asset purchase programme in...

The US is about to enact significant corporate tax cuts, and could therefore edge closer to the number 1 spot in the World Economic Forum’s ranking – currently held by Switzerland.The US is about to enact significant corporate tax cuts, that will see the federal statutory corporate tax rate drop to 21%, from 35%, starting in January (see our latest note ‘US tax cuts update – 19 December 2017’).This will significantly increase the global competitiveness of the US economy, especially as high...