Macroeconomics

Big profits from the Swiss National Bank’s massive foreign currency investments should help keep the country’s public finances in the black during 2017, Switzerland’s government said on Thursday.

Interest and dividend payments from investments bought by the SNB during its campaign to weaken the highly-valued Swiss franc allowed it to hand over some 577 million Swiss francs ($605.52 million) to federal government this year. The country’s 26 cantons, or states, have received just over 1.1 billion francs.

Switzerland’s economy grew at a slower pace than expected in the three months to June as growth provided by the financial sector and hotels was offset by “sluggish” growth for trade and public administration.

Gross domestic product grew 0.3 per cent quarter on quarter in the three months to June, according to the State Secretariat for Economic Affairs, coming in below economists’ estimates compiled by Reuters of 0.5 per cent growth.

The Swiss franc’s recent weakening against the euro is a positive development but the trend was “fragile”, Swiss National Bank governing board member Andrea Maechler said on Thursday.

“Overall, the trends are pointing in the right direction for the Swiss franc, but it is too early to say whether these trends are sustainable,” Maechler told an economic conference in Yverdon-Les-Bains.

A central bank rescue of Russian bank Otkritie has eased market concerns that other banks could be in trouble, prompting banking stocks to reverse three days of losses. Russia’s central bank stepped in on Tuesday to take at least a 75 per cent stake in Otkritie, the country’s biggest privately-owned bank, to plug a hole in its balance sheet.
The bailout highlights problems among Russia’s banks and the challenge the authorities face in trying to clean up the sector.

Tropical storm Harvey had not stopped raining on Texas before the first estimates emerged as to how many billions of dollars in damages would result from the storm. Initial estimates from insurance companies like Hannover Re put the number at $3 billion. In a note to clients, JP Morgan estimated that the insurance industry could lose $10 to 20 billion from Harvey, making it one of the top 10 costliest hurricanes to hit the U.S. Enki Holdings, a consultancy that calculates the risks and costs of various natural disasters, said Monday afternoon that its estimates for Harvey damages had reached $30 billion.

Brexit is set to deliver a much-heralded jobs boom with over 80,000 new roles to be created in Frankfurt.
A new report released by lobby group Frankfurt Main Finance found that the expected influx of 10,000 financial services staff over the next four years – fuelled by relocation plans and a banking exodus from London – will result in the creation of up to 87,667 new roles throughout the Rhein-Main-Region.

Net migration to Britain has fallen to a three-year low as a growing number of European Union citizens have left the country following last year’s Brexit referendum.

Data released Thursday by the Office for National Statistics provides evidence that the uncertainty and economic jitters caused by Britain’s vote to quit the EU are deterring immigrants and sparking a "Brexodus."

President Mario Draghi gave little indication about the next steps for monetary policy in the euro zone during a speech on Wednesday ahead of a key meeting between central bankers. The European Central Bank chief seemed to have learned from his own mistakes by avoiding commenting on how and when he might bring monetary stimulus to an end.

Speaking at a conference in Lindau, Germany, Draghi praised economists’ research and said that adjustments to monetary policy are "never easy." However, he made no reference to how the bank might adjust its own policy to the improving economic data across the euro zone, a highly debated issue among market participants.