Weekly analysis

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 [...]
21 Nov

Interest rate markets are benefitting from rising uncertainty

Temporary easing in international bond markets. Correlations remain high among major markets. Inflation still moderate. Avoid the Eurozone and the high yield segment. Key points Interest rate markets broadly benefitting from uncertainty in October US market offers very attractive opportunities Long-term interest rates likely to tighten in the Eurozone Adjustment of long-term rates in the [...]
04 Oct

Trade tensions weighing on European GDP

Slowdown in growth. Ambiguous leading indicators. End of quantitative easing. Paradigm shift with regard to long-term rates. Attractive European equity risk premium. Weekly Analysis Key points Slower GDP growth in Q2 (+0.4%), +2.1% yoy GDP growth hampered by decline in foreign trade Trade surplus down 45% in July Leading indicators losing momentum German economy is [...]
03 Oct

US economy is doing well. Beware the adverse effects of tariffs.

Exceptional GDP growth of +4.2% in Q2. Inevitable deceleration in 2019. Risk centred on tariffs. Long-term rate increase. Keep an eye on profits. Caution with regard to the S&P 500. Key points Exceptional GDP growth of +4.2% in Q2 Eighth rate hike by the Fed, moving towards the 3.1% fed funds target for 2019 Fed [...]
01 Oct

The EU rejects the Chequers plan… no deal or new vote?

Higher GDP growth in Q2 (+0.4%). Unexpected upswing in inflation. Pound hostage to the political situation. Steepening yield curve. No Brexit solution. Points clés Theresa May further weakened by the EU’s rejection of the Chequers plan The option of a new referendum is making headway as a means of breaking the deadlock A majority of [...]
26 Sep

The Japanese economy rallies, GDP jumps up +3% in Q2

Highest rate of GDP growth since 2016. Expected depreciation of the yen is the determining factor. Leading indicators still uncertain. Rising inflation. Nikkei achieves 24,000 target. Key points Unexpected and welcome surge in Japanese GDP (+0.7%) after a weak Q1 (-0.2%) Highest annualised rate of GDP growth since 2016 (+3%) Pace of growth to remain [...]
17 Sep

Switzerland posts strong economic gains: GDP up +3% in 2018.

GDP up +3.4% in Q2. Inflation at 10-year high. Steepening yield curve. Temporarily strong Swiss franc. Bullish trend in Swiss equities. Key points Exceptional and unexpected economic upturn in Switzerland in Q2 GDP growth exceeds +3% in 2018 Strong momentum in Q2: +0.7% Switzerland not immune to the risks of a trade war between Beijing [...]
02 Jul

The European economy is holding its course despite uncertainty

GDP is expected to recover. Inflation hits 2% target. The Euro is weakening. Nothing to report from the ECB until 2019. Long rate rise held hostage. 25% “discount” on European equities. Key points Euro Summit in June rings hollow Compromise on the migratory crises Brexit negotiations flounder The migrant crisis eclipses Eurozone reform The EU [...]
18 Jun

The Fed will not derail a booming economy

Acceleration in GDP growth in Q2 to +3.4%. Revision of outlook for GDP and inflation. Contraction in margins, profits and multiples. Remain cautious on the S&P 500. Key points US Federal Reserve unsurprisingly raises key rates by +0.25% Seventh hike since 2015 The Fed’s latest message is clear, monetary policy will not derail a booming [...]
14 Jun

Brexit talks and British economy at a standstill

Impossible political agenda. No more hard Brexit? Sluggish GDP growth (+0.1%). Pound in wait-and-see mode. Long-term rate adjustment postponed. Caution with regard to equities. Points clés Brexit talks: more than ever, confusion abounds The European Union rejects London’s proposals A victory for pro-European MPs that eliminates the risk of a no-deal outcome? Impossible political agenda [...]