Weekly analysis


20 Mar

Germany hampers European growth and confidence

Weak GDP growth in Q4 (+0.2%). Outlook for 2019 revised downward. ECB to reinject liquidity (TLTROs). Euro resilient. Take profit on equities. Key points European growth still very weak in Q4 2018 (+0.2%) Germany solely responsible European GDP up +1.2% yoy German economy narrowly avoids entering a technical recession Leading indicators may have already seen [...]
18 Mar

Positive surprise with Japanese GDP up +0.5% in Q4

Economic upturn in Q4. Necessary depreciation of the yen. Trade balance back in surplus. Leading indicators under pressure. BOJ remains cautious. Rising Nikkei. Key points Positive surprise with uptick in Japanese GDP in Q4 (+0.5% and +1.9% annualised) Trade surplus back on the rise (339 billion) Increase in wages not sufficient to boost consumption Leading [...]
13 Mar

Has the year-end panic already given way to euphoria?

GDP growth resumes at modest pace in Q4 (+0.2%). Interest rate trends once again atypical. New records for Swiss equities and securitised real estate. Key points Growth resumes in Q4 2018 Swiss GDP expansion of +0.2% and +2.5% (yoy) The SECO reduced its forecast for 2019 to +1.1% The manufacturing sector is the main driver [...]
09 Jan

Is a recession looming in Germany and the Eurozone?

Contraction over the last quarter in Germany? Leading indicators rather bleak. ECB remains confident. Policy rates unchanged. New opportunities in equities. Key points GDP growth down -0.2% in Q3 German industrial output drops -1.9% Slowdown in Europe is intensifying Five largest EU economies are weakening Leading indicators not optimistic Confidence gives way to concern Euro [...]
04 Jan

Robust job market and economic cycle in the US

Fed stays the course. Record job creation and wage increases. Long-term interest rates no longer contracting. Equity markets on the upswing. Caution on earnings expectations. Key points Federal Reserve stays the course in spite of market jitters 0.25% rate hike to 2.5% Fed marginally reduces its growth outlook for 2019 to +2.5% Job market will [...]
18 Dec

UK: A referendum as a last resort?

Worrisome decline in GDP growth (+0.1%). Theresa May has no plan B. Increasing likelihood of a referendum. Intolerable costs of a “no deal”. Avoid equities and bonds. Key points Theresa May will play her last card in January Why not consider a plan B? New referendum to break the deadlock Only 34% of the British [...]
15 Dec

Fears of a yield curve inversion in the US are unfounded

Yield curve inversion still synonymous with recession? Flattening versus inversion. Current situation and outlook. The Fed is not dogmatic. Unfounded fears. Key points Markets spooked in December by the risk of a yield curve inversion Risk-off mode prevails everywhere What yield curve inversion are we talking about exactly? Yield curve flattening rather than inverting? Is [...]
10 Dec

Sharp slowdown in Japan: GDP drops by -0.6% in Q3

Sharpest contraction of GDP since 2014. Economic rally in Q4. Stabilisation of the yen. Leading indicators weighed down by uncertainty. Inflation reaches +1.4%. Nikkei on the upswing. Key points Unexpected growth shock in Q3; Japanese GDP dropped by -0.6%, or -2.5% yoy Exports pick up in Q4 Trade balance turned negative Imports jumped by +19.9% [...]
05 Dec

Swiss GDP weakens in the wake of German decline

GDP contracts by -0.2% in Q3. Swiss growth remains dependent on German economy. Normal yield curve. Stabilisation of the franc. Positive outlook on equities. Points clés Euphoria gives way to bewilderment Downward revision of the growth outlook for Swiss GDP Surprise collapse of economic momentum in Q3 Swiss economy impacted by trade tensions between Beijing [...]
27 Nov

No impact of stock market volatility on foreign exchange markets

Dollar temporarily at an advantage. Euro expected to rise. Depreciation of the franc. Upswing in emerging currencies. Pound still hostage to Brexit. Weak yen. Key points The increase in stock market volatility did not significantly impact foreign exchange markets Limited rise of the trade-weighted dollar The increasing pace of growth is temporarily lending strength to [...]