The US and China have reached a 10-point trade deal that opens the Chinese market to US credit rating agencies and credit card companies. Under the deal, China will also lift its ban on US beef imports; in return, Chinese cooked chicken will be allowed into the US market and Chinese banks can enter the US market. And there were numerous other parts of the preliminary agreement. This included language that appears to pave the way for U.S. firms to export liquid natural gas to China, the expediting of Chinese safety reviews for U.S. biotechnology applications, and cooperation between Chinese and U.S. regulators over financial transactions.The deals are the first tangible results of trade talks that began in April after US President Donald Trump and Chinese President Xi Jinping met in Florida.
The Swiss National Bank's (SNB) policy of negative interest rates is not ideal but is nevertheless necessary in order to weaken Switzerland's "significantly overvalued" currency, Chairman Thomas Jordan said on the sidelines of the Private Banking Day in Zurich on Thursday. "It's not the case that we find it great to have negative interest rates," Jordan said during conference. However, Jordan said negative interest rates, along with the central bank's willingness to intervene in the currency were absolutely necessary in order to protect exporters from a stronger Swiss franc, which is a safe-haven currency in times of market stress. Those conditions will largely be dictated from abroad, particularly by the European Central Bank (ECB). He stressed Swiss monetary policy was a hostage to weak economic conditions in some EU states, which prompted the ECB to print trillions of euros and move euro interest rates into negative territory.
Richemont reported worse-than-expected results shortly before Friday's open as the Geneva-based company said a volatile trading environment had caused its net profits to slip more than anticipated. However, the world's second-largest luxury goods group noted an uptick in sales growth towards the end of its fiscal year, in large part attributable to easier comparisons and support from a sustainable recovery in mainland China, Reuters reported. Sales at Richemont fell 4 percent at constant exchange rates in the year to March, missing expectations in a Reuters poll of analysts, but with a clear improvement in the second half thanks to a recovery in the United States and strong growth in China.
An advisor to Europe’s highest court has said that Uber should be regulated as a transportation company, subjecting it to local licensing regulations which could have been considered disproportionate under EU law had it been deemed an "information society service". In a opinion handed down Thursday, Maciej Szpunar, the advocate general of the European Court of Justice (ECJ), said “Indirect control such as that exercised by Uber, based on financial incentives and decentralised passenger-led ratings, with a scale effect, makes it possible to manage in a way that is just as — if not more — effective than management based on formal orders given by an employer to his employees and direct control over the carrying out of such orders.” The decision handed down today is non-binding, though ECJ rulings have historically followed the advice of the advocate general. A final ruling is expected later this year.
At a meeting last week, CPEG, the pension fund for the Swiss canton of Geneva, has unveiled a set of structural measures to improve its funding level that could have the effect of cutting future pension benefits by up to 15%. The committee which manages the CHF12bn (€11bn) fund (employee, pensioner, and employer representatives) confirmed a plan to raise the age at which members can take a full pension from 64 to 65 as of 1 January 2018. In the same occasion, it released the decision to lower the target pension level. The pension fund said this measure would be accompanied by other technical measures of less importance, but the cumulative effect could be a lowering of pension benefits by up to 15% for active members.
The idea of Italy leaving the eurozone, or 'Italexit', "does not have the slightest basis" in fact, European Central Bank President Mario Draghi said Wednesday in a verbal tussle with a Dutch MP. Draghi repeated that the euro is "irrevocable, and that's what the Treaty says". Confronted with the possibility of the Netherlands quitting Europe’s monetary union by Eurosceptic MP Thierry Baudet, an angry Mr Draghi said: “The euro is irrevocable. This is the treaty. I will not speculate on something that has no basis.” Highlighting the ECB’s role in the eurozone’s economic recovery, he said policies had helped create 4.5m jobs. “That’s the reality, the rest is speculation." In other remarks, Draghi said it was "up to the eurozone countries to prepare for the end of quantitative easing".
Zurich Insurance Group referred its profit fell from a year earlier in the first quarter, but added that an improved economic outlook could help the company's prospects for the rest of the year. The Swiss insurer said net income fell to $607 million in the first quarter from $875 million a year earlier. A more than 3 percent change to Britain's Ogden rate, a tool for calculating personal injury and accident claims, dampened Zurich's core property and casualty business in the first three months of 2017.
According to latest reports, a slowdown in the housing market and a weakness in the construction industry only worsened amid higher costs. In your point of view, should we expect a further decrease in the UK economy? Why? Our base case scenario is that we are expecting a slowdown in the UK economy in 2017. If we ask what has been propping the UK economy up since Brexit, the answer would be the consumer spending story; we have seen consumption being fairly resilient since Brexit. On the other hand, we have seen investment taper a little bit less, therefore, what has been driving the UK economy is really consumer spending. Though, at this point, the outlook looks pretty bleak, especially if we take into account the fact that we have got a squeeze in household consumer incomes, coming from higher fuel prices, higher inflation, and a lack of wage inflation. Real incomes are being squeezed, which in theory leads to weaker consumer spending power. Thus, the channel which has been propping up the UK growth is likely to weaken a little bit going into 2017.
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