Weekly analysis

01 Jul

G20 fails to provide solutions but may induce Fed not to act

Power struggle to carry on beyond G20 meeting. Expectations of key rates’ cuts too high. Consumption to drive GDP. Reduce equity exposure once again. Key points G20 fails to provide solutions but truce could induce Fed to hold off Central bank faced with a difficult choice Lowering rates will consolidate recession scenario Waiting until September [...]
23 Jun

Recession increasingly likely in UK

Industrial output down -2.7% and GDP down -0.4% in April. Pressure on the pound. BOE steps back. Seven contenders for Theresa May’s job. Key points Who wants to replace Theresa May? Boris Johnson favourite among seven contenders Leading indicators deteriorated in May Manufacturing PMI drops under 50 Industrial output plunged by -2.7% in April Economic [...]
19 Jun

Is Europe’s GDP growth rate of +0.4% sustainable?

Consumption picking up (+0.5%). PMIs still on the fence. Long-term rates at historical low. Euro relatively stable. High risk premiums on European equities (27%). Key points European growth stronger than expected so far this year GDP up +0.4% (+1.2% yoy) Household consumption up +0.5% Leading indicators may have turned a corner and seem to be [...]
14 Jun

Japanese GDP resilient despite trade showdown

GDP growth stabilises at +2% yoy. Cautious consumers. Manufacturing under pressure. BOJ may cut rates to -0.3%. Nikkei impacted by trade tensions. Key points More positive surprises in Q1 with +0.5% GDP growth Japanese growth stabilises at +2% yoy, surprising forecasters Less impressive performance than it might seem Consumers remain worried Leading indicators still weighed [...]
11 Jun

Is the current euphoria in the Swiss equity market sustainable?

Sharp upturn in GDP growth. Solid outlook for 2019. Interest rate trends still atypical. Caution with regard to euphoria in the equity market. Key points Sharp increase in GDP in Q1 (+0.6%, +1.7% yoy) We maintain a growth outlook of +1.5% for 2019 Domestic and foreign demand together are boosting economic momentum in Switzerland Outlook [...]
03 May

Long-term rates do not react to the +3.2% increase in US GDP

Excessively pessimistic rate markets. Global growth remains solid. Rising inflation and long-term rates. Avoid the European market. Overweight the US market. Key points Long-term rates have not yet reacted to the +3.2% increase in US GDP in Q1 Rising inflation and long-term rates Fed will leave rates unchanged in 2019 ECB will remain accommodative Yields [...]
30 Apr

International securitized real estate remains an attractive opportunity

More moderate increase in direct real estate prices. Economic growth boosts real estate investments. Interest rates not threatening valuations yet. Stay invested. Key points Exceptional 1st quarter for international securitised real estate Logical loss of momentum in April The decline in interest rates supported the recovery of prices Risk premiums are still favorable More moderate [...]
12 Apr

Uncertainty persists following six-month Brexit extension

More time to avoid a no-deal withdrawal. Economy on the brink. Interest rates out of kilter. Resilient currency. Caution on the pound and all UK asset classes. Key points The deadline has come and gone, now what? More time to avoid a no-deal withdrawal Six-month extension until 31 October 2019 No-deal risks not factored into [...]
28 Mar

Consumption to boost US GDP in Q2

Growth will improve in Q2. Employment is the key variable. Rising wages will boost consumption. No Fed action. Upswing in inflation. Take profits on equities. Key points Sustained pace of growth in the US GDP up +2.2% in Q4 2018 Annual growth exceeds +3% Likely slowdown to +1.5% in Q1 2019 Growth expected to accelerate [...]
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 [...]