9 October 2015.
Brought to you by Investec Switzerland.
Swiss equities under perform global shares on Hillary Clinton’s drug pledge
The Swiss Market Index (SMI) is set to finish the week positively, following Global markets higher as stocks rally on news that the Federal Reserve may keep rates lower for longer than expected. Minutes released on Thursday from September’s Federal Reserve meeting showed members have ongoing concerns over low inflation which could mean that U.S interest rates are kept at the current historic lows into 2016.
The SMI did however underperform global stocks this week after healthcare giants Roche and Novartis sold off with biotech firm Actelion after Democratic presidential front-runner Hillary Rodham Clinton reaffirmed her pledge to stop “price gouging” in the drug industry.
Although Investors shrugged off weak US factory reports and disappointing German export data to push equities higher, stock markets remain volatile on worries about the impact of slowing growth in emerging markets and uncertainty around the outlook for U.S interest rates.
Annelise Peers, CIO of Investec Bank, Switzerland explains the impact of these issues on the global economic outlook in the video below.
IMF cuts global outlook
The global economy is having power problems. A slowdown in emerging markets driven by weak commodity prices forced the International Monetary Fund to cut its outlook for global growth this year to 3.1 percent from a July forecast of 3.3 percent.. By Andrew Mayeda (Bloomberg). Read more.
China’s currency fix turns into more volatility everywhere else
China’s record draw on its foreign-exchange reserves is proving to be a catalyst for exaggerated price swings in currency markets around the world. The People’s Bank of China slashed its holdings by the most ever last quarter to prop up the yuan after its shock devaluation in August. By Joseph Ciolli and Lu Wang (Bloomberg). Read more.
KOF Economic autumn forecast for Switzerland
In contrast to many economic observers feared, the Swiss economy recorded a slight increase in real production in the second quarter 2015. (KOF). Read more.
Basel may axe bank operational-risk models
Banks may lose the option to gauge their operational risk using internal models under a proposal that the Basel Committee on Banking Supervision plans to publish later this year. The Basel group, which brings together regulators from countries including the U.S. and China, raised the possibility of a “considerable simplification” of operational risk assessment rules in a November 2014 report to the Group of 20 nations. By Patrick Henry (Bloomberg). Read more.