European stock exchanges, including the SMI, rallied after German Chancellor Angela Merkel managed to save her coalition government from collapse. That’s because markets see Merkel as the pillar of the European Union, says Esty Dwek Roditi, senior investment strategist at Natixis Investment Managers. With the Merkel coalition back from the brink before markets opened again, the euro also strengthened against the Swiss franc. According to Dwek Roditi, the status quo in Germany is needed as a counterbalance to EU challenges such as Brexit and economic growth.
Be it Turkey, Argentina or Indonesia, investors are getting cautious when it comes to investing in emerging markets. Arthur Lau, co-head of emerging markets fixed income at Pinebridge Investments, advises investors to be selective.
Oil prices rose on Friday ahead of this weekend’s meeting between OPEC and other large crude exporters. According to Cornelia Meyer, economist and energy expert, we will continue to see gains as the market tightens.
The SNB predicts inflation in Switzerland will be lower than expected. For Thomas Stucki, CIO of the St. Galler Kantonalbank, the signal is clear: It gives the SNB more freedom to wait for the European Central Bank to raise interest rates. This, though, won’t be before 2019.
The Annual Meeting of the New Champions 2018—or the Summer Davos Forum—starts on Wednesday in Tianjin, China. In his opening speech, Chinese Premier Li Keqiang said that unilateral trade actions will not solve any problems, stressing that multilateralism should instead be upheld. Experts argue that the Chinese economy will not be hit hard by the latest trade tensions with the U.S.
Despite all the warnings of regulators, Stefan Heitmann, founder and CEO of MoneyPark, still sees opportunities in the Swiss real estate market. In his opinion, mortage rates will continue to move sideways and property prices will not rise as they have been in the last few years.
As trade war tensions increase yet again, investors have a lot to consider. According to David Stubbs, head of client investment strategy at J.P. Morgan Private Bank, there’s still a bumpy road ahead. But in his view, valuations in most markets, which have been hit in the last month, might recover. One of them could be China.
Since the Trump administration initiated the latest round of the U.S.-China trade war, markets have recovered. According to Eleanor Taylor Jolidon, co-head of Swiss & Global Equity at UBP, investors still hope that a trade resolution will be reached.
The tough talk on tariffs is, for the moment, yesterday’s news, and markets were in full recovery mode today—all, that is, except the Swiss stock exchange. The SMI closed down 0.23 percent at 8915.87 points. Watch our Markets Summary to find out why.
The Swiss economy is booming. According to the forecast Monitor Switzerland by Credit Suisse published Tuesday, it is set to grow by a stronger-than-average 2.7 percent in 2018. Despite this positive news, wages aren’t following this trend. Nominal wages in Switzerland have on average risen by less than 1 percent per year since the financial crisis and in 2017 only went up by 0.4 percent. According to Oliver Adler, chief economist of Credit Suisse, there are many reasons for this. One of them is that wage demands from trade unions have also been moderate compared to the demands made 20 years ago.
The London Inter-bank Offered Rate (LIBOR) plays a critical role in today’s financial world. Some USD 350 trillion in financial contracts are tied to it worldwide. But the system is about to change, and Switzerland is the first to move to a new reference rate: the Swiss Average Rate Overnight (SARON). This is a huge challenge for the whole financial industry. According to Silvia Devulder, director at EY, there are still some preconditions to be fulfilled before the full transition
The Swiss National Bank will give its latest update on monetary police this week. Experts are not expecting any changes until the European Central Bank moves—and that will be not before next fall. EFG’s Chief Economist Stefan Gerlach would still appreciate if the SNB would give some signal on how it plans to address the higher inflation in Switzerland.