On Wednesday 21 March, the Federal Open Market Committee (FOMC) of the Federal Reserve Bank (Fed) announced they would raise the interest rates by 0.25 % to a new target range between 1.5 % and 1.75 %. The FOMC argues that compared to its last meeting in January 2018, the economic activity and labor market [...]
EU Banking Union Fundamentals Update as at 17 March 2014 by Lorenzo Beriozza It is a common understanding that a banking union - and a proper fiscal union, too - is essential for the long-term viability of the euro construct. However, it is also true that the urgency for a banking union has faded, in [...]
US Budget Update Fundamentals Update as at 23 February 2014 by Lorenzo Beriozza Under current tax and spending laws, the CBO projects the federal budget deficit will shrink over the next few years, reaching a low of $478 billion (2.6% of GDP) in fiscal year 2015. However, several forces are expected to increase deficits later [...]
Swiss Referendum Fundamentals Update as at 13 February 2014 by Lorenzo Beriozza Last Sunday, the Swiss decided by a narrow margin to restrict "mass immigration". This should not have any impact on the economy in the short term. The renegotiation of agreements is also likely to be low-key in order not to jeopardise close economic [...]
US Cold Weather Fundamentals Update as at 11 February 2014 by Lorenzo Beriozza The challenge is to quantify the drag to economic growth and determine how it manifests itself in the high frequency data. Focusing on the winter months of December and January, weather can explain about a third of the deviation from the underlying NFP [...]
US Debt Ceiling Fundamentals Update as at 6 February 2014 by Lorenzo Beriozza The forecast is the Treasury will exhaust extraordinary manoeuvres on February 28, the settlement date of the end-of-month coupon auctions. The exhaustion of the federal government’s cash balance is likely to occur on the next business date, March 3, and thus the [...]
S&P 500 Fundamentals Update as at 5 February 2014 by Lorenzo Beriozza January saw a loss of 3.5%, the biggest one-month loss in the S&P 500 Index since May 2012. The main driver of this weakness seems to be sharp currency declines and accompanying stock market losses in several emerging markets, such as South Africa [...]
Euro Zone Update Fundamentals Update as at 30 January 2014 by Lorenzo Beriozza The relative calm in financial market conditions across the euro zone over the last year has resulted both from the policy actions taken by the ECB as well as from lower external financing needs across the periphery. In addition, shrinking private demand for [...]
Euro Area Deflation Fundamentals Update as at 29 January 2014 by Lorenzo Beriozza Euro inflation is below the ECB’s 2% target and was 0.8% last December while core inflation reached a new historical low of 0.7%. This month, inflation is expected to be unchanged and inflation is only set to increase slightly in 2015. Core [...]
Markets and Presidential Office Fundamentals Update as at 15 January 2014 by Lorenzo Beriozza The beginning of the year is often full of talk about what indicators to watch as to how the year may unfold: the first five days indicator, the January effect, the Super Bowl indicator, even the Chinese lunar New Year cycle, [...]
