Tag Archives: Macroview

There are no obvious candidates to succeed Xi Jinping when he completes his second term as general secretary of the Chinese communist party in 2022.The Central Committee of the Chinese communist party convened for the first time on 25 October to elect the new Politburo and the Politburo Standing Committee (PSC). Unsurprisingly, Xi Jinping and Li Keqiang were both re-elected as members of the PSC, and Xi was reappointed general secretary of the Party. The other five seats went to new faces to...

Prospects look bright for Switzerland next year- thanks in part to the manna received from important world sports events.According to SECO’s estimates, the Swiss economy contracted in the final quarter of 2016, while Q3 2016 and Q1 2017 figures were revised down. The downturn in SECO’s GDP figures was exacerbated by special effects related to the inclusion of sports events in the “Art, entertainment, recreation and other services” sector. “Art, entertainment, recreation and other services”...

The rise in the US deficit may sap support for Trump’s ambitious plans to cut taxes.US fiscal year 2017, which ended on September 30, did not end on a high note. The deficit rose to 3.5% of GDP, edging up 0.3 percentage point from fiscal year 2016. This deterioration stands in stark contrast to the overall improvement in the US economy. GDP growth remains above potential, and unemployment has been on a downward trend throughout the year.What is particularly puzzling, if not worrying, is the...

The latest ECB's lending survey shows credit conditions remain loose for the private sector, paving the way for cautious ECB policy normalisation.The ECB’s October Bank Lending Survey (BLS) indicated that credit standards were broadly unchanged in Q3, while some modest easing was expected in Q4. The brightest spot is loan demand, which is expected to rebound for all types of loans moving forward.Net demand for bank loans to enterprises increased further in Q3, in line with banks’...

The euro area composite PMI index fell slightly in October, consistent with our forecast of a moderate slowdown in activity in Q4.The euro area composite flash PMI declined to 55.9 in October, from 56.7 in September, below consensus expectations, led by a drop in the services sector which offset an increase in manufacturing. However, survey details were fairly strong, especially in terms of job creation.In Germany, the survey points to robust private sector growth. The PMI index decreased,...

While markets have remained stoic about evolving political situation in the region, prolonged uncertainty could have an impact.The response given by the Catalan President Carles Puigdemont to the Spanish government’s ultimatum last week did not provide the clarity the central government was seeking on whether or not the Catalan parliament would formally declare independence.As a result, the central government therefore has decided to invoke Article 155 of the Spanish constitution, for the...

The Senate budget resolution this week was a positive step, but we remain cautious about the scope of any tax cuts eventually enacted.The US Senate this week approved a budget resolution, which effectively allows it to side-step Democrats’ opposition to start formulating tax cuts. The bottom line is that the Senate vote increases the odds of some tax cuts actually happening, but we think that the road to the finish line will be bumpy and that any tax cuts, if enacted, could be modest. There...

The acceleration in construction activity is boosting capital expenditure and supporting the euro area’s cyclical upturn.Since the beginning of the year, euro area capital expenditure has picked up noticeably. The acceleration has been mainly driven by the construction sector (which accounts for almost 50% of total capital expenditure), while business equipment has continued to expand strongly. Construction activity is still 19% below its pre-crisis (2008) level, and has room to improve....

In his speech to the 19th Communist Party Congress, Xi Jinping unveiled his vision of China and for deep-reaching structural reforms.This week, in a speech to the 19th Communist Party Congress, Xi Jinping, party general secretary and the president of China, outlined his vision for China through to 2050.Xi argued that China has embarked on a new stage of development. On the political front, he believed that China has become stronger and will move closer to the central stage of world affairs....

We remain constructive on gold, but some other precious metals face issues stemming from a moderate slowdown in global growth and changes in the auto industry.While gold prices have risen about 12% per troy ounce since the beginning of this year, we still have a constructive view of the gold price over the next 12 to 18 months. But does this mean that the outlook for precious metals in general is positive?Notwithstanding fluctuations in the US dollar, gold has generally benefited from a low...