François Christen
Chief Economist
The economic and financial environment deteriorated sharply during the third quarter, as Western central banks turned increasingly tough to restore price stability damaged by soaring energy prices, supply chain deficiencies, unsustainable fiscal largesse and tight labor markets.
The growth outlook has darkened, as mirrored by recent surveys and ongoing decline in leading indicators. Central bankers expressed an explicit willingness to sacrifice growth, jobs and thus corporate earnings in order to fight inflation. This “hawkish” stance prompted a sharp increase in bond yields with major repercussions for the pricing of all financial assets.
Cyclical headwinds are not expected to abate soon. On the contrary, the fast and substantial increase in interest rates and the energy crisis boiling in Europe will further shrink real earnings and hinder private demand. Falling commodity prices could nevertheless provide some relief.
The geopolitical background is worrisome. The globalization process that has fueled low inflation for decades is reversing. The war in Ukraine shed a light on the erosion of the market friendly liberal democratic model that is increasingly challenged by the rest of the world, notably China. Rampant populism and nationalism, also taking root in the US and in Europe, carry serious risks for investors.
It may take time before the tide turns, but the picture is not completely grim. The rise in interest rates is largely priced in by the bond market. Further revision in central banks’ hawkishness cannot be excluded, but a large part of the correction is now history. Compelling signs that inflation is finally receding could prompt a significant rebound in depressed financial assets in a not so far future.
Macro Silicon Valley Bank (SVB), a micro chaos resolved while forgetting the macro risk
The implosion of small banks in the US generates immense confusion and a flight to safety.
Corporate 2022 ANNUAL REPORT & INVITATION TO 2023 AGM
ONE swiss bank SA publishes its 2022 Annual Report, announces a dividend payment and notifies of the agenda for the 2023 Annual General Meeting.
Macro Between realism and complacency
The disconnect between equities and bonds, which have been falling for a month, is widening further.
Macro Le retour à la lucidité crée des opportunités
La violente correction obligataire survenue en février relance un thème d’investissement majeur pour 2023.
Macro The market is now in tune with the Fed
Bond investors have finally bought into the roadmap outlined by the US central bank.
Corporate 10th Annual WealthBriefing Swiss Awards 2023
We are thrilled to have won on 9 February 2023 the award for “Best Corporate Strategy Implementation” at the 10th Annual WealthBriefing Swiss Awards 2023.
Macro Une bonne nouvelle plombe l’ambiance
La vigueur du marché du travail américain apporte de la crédibilité à la posture austère de Jerome Powell.
Corporate H2 and full-year 2022 financial results
After a challenging year in which global financial markets experienced unprecedented turmoil, we are pleased to report that ONE swiss bank’s financial turnaround is now complete.
Macro The menu promises to be copious and digestible
Central banks have signalled their immediate plans, but the dessert is still a surprise.
Macro La Fed est en phase d’approche
Le succès de la manœuvre d’atterrissage reste incertain, les risques de récession sont élevés.
