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Julius Baer _ Banco Nacional de Suiza, inflación EE.UU. y petróleo

Redacción - Jueves, 14 de Septiembre

ECONOMICS Swiss National Bank: No change in successful stance needed At 9.30 a.m. CET today, the Swiss National Bank (SNB) will release the quarterly reassessment of its monetary policy stance. We expect no policy change. The Swiss economy is enjoying an upturn, along with its eurozone neighbours. Moreover, the recently lower-trending franc to the euro significantly reduced the franc’s latent appreciation risk, which had lingered since the abolishment of the EUR/CHF currency floor in January 2015. Today, the SNB can credit itself as having been successful in stabilising the franc to the euro sufficiently when needed, thereby supporting the efforts of Swiss exporters to retain market shares in the eurozone, Switzerland’s main trading partner. The three-month Swiss franc London-Interbank-Offered-Rate target of -0.75% will therefore remain in place and the SNB will be ready to intervene in the foreign exchange market if necessary. After all, and despite the current eurozone euphoria bolstering the euro, the Swiss franc globally remains the most important ‘safe haven’ currency, even compared to the Japanese yen. We expect the franc to retain its safe-haven status not only in case of further tensions over North Korea, but also (more importantly) in the run-up to the Italian elections in spring 2018, which are very likely to create uncertainty for the eurozone. The SNB’s updated economic outlook will confirm overall highly-benign perspectives. Its growth expectation for 2017 is likely to be reduced to a figure closer to 1% from previously 1.5%, as official revisions of recent growth data lower the average figure for this year. On the other hand, a slight increase of the conditional SNB inflation forecasts for 2017, 2018 and 2019 is in the cards.


We expect no surprises in today’s SNB monetary policy assessment. The Swiss economy continues to thrive without much inflation pressure from the global and, in particular, the European recovery. This enables a relaxed, but nevertheless alert currency stabilisation stance by the SNB, as the franc still remains a ‘safe haven’ in times of financial market stress.


Janwillem Acket, Chief Economist, Julius Baer



US inflation will tick higher, but not today


Today’s US inflation report for August will most likely reveal steady inflation with the headline rate ticking up to 1.8%, while the core rate will come in slightly lower at 1.6%. Both inflation measures had been reported at 1.7% in July. The US economy, currently running at full capacity, is showing surprisingly little signs of inflation. As a result, expectations that the Federal Reserve (Fed) will raise rates once more this year have been declining. We are confident that US inflation will eventually tick higher, most likely in October/November and rate hiking expectations will return. This will support the US dollar going forward, and we stick to our forecast of EUR/USD weakening to 1.14 until year-end.


The latest inflation report will shift today’s attention on Fed policy. We expect inflation to be steady, accelerating only towards year-end.


David Kohl, Chief Currency Strategist, Julius Baer






Oil: Brent touches USD 55 on positive demand outlook


Oil incrementally gained this week with benchmark Brent prices climbing above the much watched USD 55 per barrel mark yesterday. Support in part came from the International Energy Agency, which reported seasonally tightening global oil inventories and raised their full-year demand growth estimates. The news was taken as confirmation of the prevalent supply tightening narrative, i.e. that the oil surplus is slowly disappearing. However, we believe that the news is largely backward-looking and mainly confirms what the timely and accurate official US statistics had been revealing throughout the summer: strong fuel demand and declining crude oil storage. Instead, the focus should be on the near-term out-look. The oil market enters a soft patch as the summer driving season wraps up and hurricanes Harvey and Irma more negatively impact demand than supply. Whether the reconstruction activity will offset the demand dent remains to be seen. Moreover, shale drilling economics remains attractive and recently flattish rig counts are a healthy pause from the drilling frenzy witnessed earlier in the year. We stick to our neutral view but see oil prices trading at the upper end of a fundamentally justified price range.


Oil prices incrementally gained this week in part supported by a stronger demand outlook. We see oil trading at the upper end of a fundamentally justified price range. The upcoming seasonal demand soft patch is set to create near-term headwinds.


Norbert Rücker, Head Macro & Commodity Research, Julius Baer