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Wellington and York Partners Taipei Taiwan: Switzerland IMF Executive Board Concludes 2018 Article IV Consultation
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On June 11, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation [1] with Switzerland.

The economy has adjusted to the large cumulative exchange rate appreciation that took place since the global financial crisis. After a subdued start to 2017, GDP growth accelerated to
1.1 percent last year, and the positive momentum continued in Q1:2018, although at a slightly reduced pace. The improved external outlook, together with the depreciation since mid-2017, are expected to energize the economy and lift GDP growth to 2¼ percent in 2018, before it gradually moderates to 1¾ percent over the medium term. After five years of falling or flat prices, headline inflation turned positive in mid-2016 and had risen to 1.0 percent in May 2018. Inflation is expected to increase to the upper half of the target band in 2018–19, and to subsequently revert to the mid-point. The better global environment had—until recently—halted safe-haven appreciation pressures, and the franc weakened by around 8 percent in real effective terms during mid-2017 to April 2018. The current account surplus has remained large and relatively stable around 10 percent of GDP.

Policies adopted in recent years have aided the recovery and mitigated risks. The two-pronged approach to monetary policy—combining a negative interest rate with foreign currency purchases—has supported the return of modest inflation and the recovery of growth. A series of macroprudential measures was introduced targeting systemic risk in the real estate market, although prices remain high relative to household income and exposure to mortgage debt is elevated. The fiscal position has remained strong with sustained small surpluses and declining public debt.

The Swiss economy continues to face important challenges. Rising international trade tensions could impact Switzerland’s externally-oriented economy and more uncertain geopolitics could rekindle safe-haven pressures, sharply appreciating the franc. A resurgence in global inflation could trigger an abrupt policy tightening by major central banks, leading to spillovers to Swiss property prices. Population aging and slower immigration will create funding gaps in the public pension system. Uncertainty regarding long-term Swiss-EU relations could affect cross-border flows. Initiatives leading to abrupt institutional changes could undermine public confidence, and further delays in meeting international standards on corporate income taxation (CIT) could reduce Switzerland’s appeal as an investment destination.

Executive Board Assessment [2]

Executive Directors commended the Swiss authorities for skillfully navigating the economy through challenging times. Despite the substantial pressures on the exchange rate since the global financial crisis, the economy continues to demonstrate resilience. Prospects remain favorable, with moderate growth and inflation. The outlook is nevertheless subject to risks, including from international trade tensions, renewed safe‑haven pressures, imbalances in the mortgage and property markets, and uncertainty about corporate tax reform. Directors underscored the need for continued vigilance and sustained reform to raise potential growth and competitiveness.

Directors concurred that the current accommodative stance of monetary policy is appropriate. With inflationary pressures expected to remain low, they recommended that future decisions be gradual and well‑communicated, guided by domestic conditions while also taking into consideration actions by major central banks. Directors considered that the two‑pronged monetary policy has effectively supported inflation and growth. They saw merit in clearly assigning policy tools to help further enhance communications with markets, using interest rates to address cyclical conditions and interventions to respond to excessive foreign exchange market volatility.

Directors agreed that the debt brake fiscal rule has served Switzerland well, contributing to the reduction in public debt and counter‑cyclical support. Given constraints on monetary policy, most Directors encouraged the authorities to adopt a balanced structural position by utilizing the available fiscal space, which would allow for a more balanced mix of macroeconomic policies in support of domestic demand, facilitating the reduction of the high current account surplus. A number of Directors saw a need to remain prudent, noting that additional fiscal spending should depend on the nature of the shock. Directors welcomed recent initiatives to increase the flexibility of spending within and outside of the rule, and consideration of possible amendments to address persistent budget underruns.

Directors commended the authorities for the progress in enhancing the resilience of the banking sector, including through the tightening of macroprudential policies. They noted vulnerabilities from sustained low interest rates and elevated exposures to real estate by both financial institutions and households. In this regard, Directors saw scope for targeting macroprudential measures to contain risk‑taking in the property market and removing tax incentives that encourage leveraged acquisition of real estate.

Directors emphasized the importance of continued structural reform to enhance productivity and preserve Switzerland as a prime destination for foreign investment. Specifically, they encouraged reforming the pension system to ensure its long‑term viability and further enhancing compliance with international standards on taxation, tax transparency, and AML/CFT. Promptly adopting the corporate income tax reform would help boost investment by small‑ and medium‑sized firms, encourage RandD, and improve competitiveness of labor‑intensive sectors.

Wellington and York Partners Taipei Taiwan: Switzerland to vote on change in monetary system
on Wellington and York Partners Taipei Taiwan: Switzerland to vote on change in monetary system
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Polls indicate only a third of voters approve of the plan, but the threat of a Brexit-style surprise worries investors who fear it may unleash uncertainty in Swiss assets

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A “yes” vote would mean banks could lend only the money they administer in savings accounts, or what they get from relatively expensive money markets and the Swiss National Bank, and it would crimp the SNB’s ability to intervene in currency markets. That means a more volatile Swiss franc, probably a move higher for a currency that has traditionally been viewed as a safe haven. PHOTO: REUTERS

London

SWITZERLAND’S banking and monetary system is facing the chance of a huge shake-up, and while the possibility looks remote, investors are buying up insurance against swings in the franc and the shares of the biggest Swiss lenders. Swiss voters go to the polls on June 10 for a referendum on whether Switzerland should switch to a so-called sovereign money system.

Approving the measure would make it much harder for commercial banks to extend credit, turning the Swiss National Bank (SNB) into the only source of new money in Switzerland. Opinion polls indicate the initiative, known as Vollgedd, won’t pass – only a third of voters currently back the plan branded “a dangerous cocktail” by SNB governor Thomas Jordan. But with a tenth of voters still undecided, fears of a Brexit-style shock remain.

A “yes” vote would mean banks could lend only the money they administer in savings accounts, or what they get from relatively expensive money markets and the SNB, and it would crimp the SNB’s ability to intervene in currency markets. That means a more volatile Swiss franc, probably a move higher for a currency that’s viewed as a safe haven.


And it would hit the profits of banks such as UBS and Credit Suisse.SEE ALSO: Three years on from currency shock, Swiss central bank can’t get back to normal

“This kind of a banking system hasn’t been seen for a long time,” said Neil Weller, a currency strategist at JP Morgan Asset Management in London.

“The referendum would also unleash a lot of uncertainty into Swiss assets, including equity and bonds.” Some traders are preparing for the risk through tail-risk hedging strategies, insuring against market corrections via put options on stocks and the dollar/Swiss franc. A put option holder has the right to sell a specified amount of a security at a set price, benefiting if the security’s price falls. Bank shares will probably fall if the referendum succeeds, increasing the value of the options.

They’re still cheap, because they are mostly “out of the money” – their strike prices are well below current levels. Option markets indicate some activity in out-of-the-money puts on UBS and Credit Suisse, expiring a couple of days after the referendum, according to Thomson Reuters data.

For example, the volume of puts on Credit Suisse expiring the Friday after the referendum is at a peak of 29,080 and 27,628 contracts for a strike price of about 25 to 30 per cent below the cash market price, according to Thomson Reuters data. UBS and Credit Suisse shares fell to multi-month lows in May. They were partly reacting to Italian political turmoil and worries over contagion across Europe’s banks, but Vollgedd would exacerbate their problems.

To lend, they would have to get funds from money markets or borrow from the central bank. That is a big deal in a country where the banking system is twice the size of the economy, according to ING strategists. With market volatility still low, “this is the equivalent of buying a cheap insurance policy”, a sales trader at a US bank said. The biggest impact may be felt in currency markets, where the SNB intervenes regularly to hold down the value of the franc during global market stress.

A “yes” vote “would greatly reduce the ability of the SNB to intervene … and would lead to upward pressure on the franc”, JPM AM’s Mr Weller said. Accordingly, in currency derivative markets, two-week risk reversals that encompass the date of the event show a slight bias towards franc calls – expecting the Swiss currency to appreciate against the dollar. Some bets are also against the currency. Some large options are struck about 3 to 5 per cent above current market levels on the euro/franc suggesting some punters may be betting the euro could rise initially if the vote goes through. Italy’s political ructions have lifted the franc to around 1.1547 francs per euro and 0.99 francs to the dollar.

But before that, speculators had built record short positions, betting the SNB would stick to ultra-low interest rates longer than other central banks. Governor Jordan stressed that negative interest rates and interventions were suited to the country’s “fragile” currency markets. Kaspar Hense, a portfolio manager at Bluebay Asset Management, said a “yes” vote would unleash a deflationary shock across the Swiss economy, which the central bank would have to fight.

“The franc should in its first reaction appreciate,” he said, because traders would ramp up bets that the SNB wouldn’t keep trying to weaken the franc. REUTERS

Wellington and York Partners Taipei Taiwan: EMERGING MARKETS-Trade strains, dollar roil emerging stocks, currencies
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By Karin Strohecker

LONDON, June 15 (Reuters) – Rattled by trade war fears and steep dollar gains, emerging markets ended the week on a sour note with stocks slipping to more than two-week lows and a clutch of currencies on track for their worst week in years.

MSCI’s emerging market stocks benchmark fell 0.8 percent on a third day in the red, with Chinese mainland stocks suffering while export-heavy South Korea slipped 0.8 percent.

Markets were spooked the heightening prospect of a trade war after a U.S. administration official said President Trump had made up his mind to impose “pretty significant” tariffs on Chinese goods.

Beijing said it was ready to respond if Washington chose to ratchet up trade tensions.

Trump is due to unveil revisions to his initial tariff list targeting $50 billion of Chinese goods on Friday, while a second list of tariffs on $100 billion in Chinese goods is nearly completed.

Emerging assets had already suffered on Thursday, digesting Wednesday’s hawkish outlook from the U.S. Federal Reserve with the dollar racing higher after the European Central Bank signalled on Thursday it would keep interest rates at record lows up to at least mid-2019.

The dollar’s index against a basket of six major peers rose 0.3 percent to 95.111, its highest level since November, after rallying more than 1 percent the previous day.

“The tightening impact on financial conditions of the stronger dollar doesn’t help and I think that is at the centre of all the crises we are now talking about in emerging markets,” said Jim McCaughan, CEO of $450 billion asset manager Principal.

He expected the dollar to continue go “somewhat higher”.

Turkey, which with its large external financing need took centre stage in a recent emerging markets selloff, saw its lira weaken 0.5 percent in a fifth straight day of losses, putting the currency on track for its worst week since the height of the 2008 financial crisis.

Mexico’s peso, a lightning rod for trade sentiment across emerging markets, extended Thursday’s tumble to weaken 0.2 percent – its weakest level in 18 months. The peso is on track for its worst week since 2015.

China’s yuan fell to a near two-week low against the dollar after the central bank in Beijing fixed the official midpoint at the lowest in five months.

Russia’s rouble slipped 0.4 percent ahead of a central bank decision. Policymakers are expected to keep rates unchanged despite inflationary pressures following U.S. sanctions.

South Africa’s rand bounced 0.5 percent, clawing back half of Thursday’s losses.

Borrowing costs across emerging markets stayed at their highest in 18 months.

The premium demanded by investors to hold emerging market hard-currency debt over safe-haven U.S. Treasuries as measured by the J.P.Morgan EMBI Global Diversified index has widened 13 basis points (bps) to 356 bps from last Friday’s close.

For GRAPHIC on emerging market FX performance 2018, see tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2018, see tmsnrt.rs/2dZbdP5

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see) (Reporting and graphic by Karin Strohecker, additional reporting by Marc Jones; editing by John Stonestreet) Our Standards:The Thomson Reuters Trust Principles.

Wellington and York Partners Taipei Taiwan: Singapore inflation dips in April as consumer price index inches up 0.1%
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The overall cost of retail items rose by 0.9 per cent in April, lower than the 1.3 per cent increase in March, due to a steeper year-ago decline in the prices of personal care products, as well as a drop in the prices of recreation and entertainment goods. PHOTO: BT FILE

SINGAPORE’S inflation eased last month, against expectations, due to the slower pace of price increases seen across several major categories of consumer spending.

The consumer price index – the main measure of inflation – edged up 0.1 per cent in April compared with the same month last year, according to Department of Statistics data released on Wednesday.

This was lower than March’s 0.2 per cent rise and also below economists’ forecast of a 0.4 per cent increase.

The weaker inflation reading was due to smaller increases in the prices of retail items, electricity and gas and services, as well as a steeper fall in the cost of private road transport, the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) said in a joint statement on Wednesday.

Core inflation – which strips out accommodation and private road transport costs to better gauge everyday expenses – dipped to 1.3 per cent in April from 1.5 per cent in March, mainly reflecting lower retail inflation and a smaller increase in electricity tariffs.SEE ALSO: Malaysia’s annual inflation seen quickening in May

The overall cost of retail items rose by 0.9 per cent in April, lower than the 1.3 per cent increase in March, due to a steeper year-ago decline in the prices of personal care products, as well as a drop in the prices of recreation and entertainment goods.

The cost of electricity and gas rose at a more moderate pace of 3.7 per cent in April, compared to 6.2 per cent in the previous month, reflecting a smaller increase in electricity tariffs.

The cost of private road transport fell by 0.8 per cent in April, larger than the 0.6 per cent decline in March. This was due to a decline in car prices on a year-ago basis following a fall in Certificate of Entitlement (COE) premiums, which more than offset a steeper increase in petrol prices.

CPI
Services inflation eased to 1.3 per cent in April, from 1.4 per cent in the preceding month, as a larger decline in telecommunication services fees and more modest increases in airfares and recreational and cultural services fees outweighed a stronger pickup in holiday expenses.

Food inflation was stable at 1.4 per cent in April, as a faster pace of increase in the cost of prepared meals was offset by a smaller increase in the prices of non-cooked food items.

The cost of accommodation fell by 3.6 per cent in April, larger than the 3.4 per cent decline in the preceding month, as a smaller increase in the cost of housing maintenance and repairs more than offset a slower pace of decline in housing rentals.

MAS and MTI said consumer price increases will remain moderate, as retail rents have stayed relatively subdued and firms’ pricing power may be limited by market competition.

They said imported inflation is likely to rise mildly. Global oil prices have rallied since the start of 2018 and are expected to average higher for the full year as compared to 2017. Global food commodity prices are projected to rise slightly as global demand strengthens amid ample supply conditions.

Domestic sources of inflation are expected to increase alongside a faster pace of wage growth and a pickup in domestic demand.

Wellington and York Partners Taipei Taiwan: Switzerland has most expensive food and drinks in Europe
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Coop Silhcity in Zurich
Switzerland was the most expensive in Europe for food and non-alcoholic drinks in 2017 ( 68% more than the EU average)(Keystone)
Switzerland has been ranked the second-most expensive European country behind Iceland for consumer goods, which are 59% higher than the European Union average. Food and non-alcoholic drinks are particularly pricey.

For the third year in a row, Switzerland was the most expensive in Europe for food and non-alcoholic drinks in 2017 ( 68% more than the EU average, slightly down from 2016), according to Eurostat data for 2017 released on Wednesdayexternal link.

But it was also the second most expensive European country for clothing ( 53%) behind Iceland, and the third most expensive for hotels and restaurants ( 63%), behind Iceland and Norway.

Personal transport was close to the EU average. Electricity, gas and other fuels were more expensive ( 7%), while consumer electronics (-5%) and furniture (-9%) were cheaper than the EU average.

External Content
Prices Eurostat


According to the Federal Statistical Officeexternal link, in 2014 the median monthly gross salary of a single Swiss adult was CHF6,250 (€5,420). While Swiss salaries might seem higher than in other countries – especially in some sectors – the cost of living in the small alpine country is very high. For example, people spend about a third of their income on rent alone. Inflation has remained very low in recent years.

Switzerland ranks among the leaders in Europe for purchasing power, either in terms of gross domestic product per capita ( 58% above the EU average), or actual individual consumption (AIC) per capita, which is a calculation of all goods and services actually consumed by households ( 26%).

External Content
Eurostat graphic purchasing power

Wellington and York Partners Taipei Taiwan: Switzerland Passes On Sovereign Money Initiative
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An initiative to prohibit commercial banks in Switzerland from electronically creating money when they make a loan was overwhelmingly rejected by Swiss voters.

According to Reuters, more than three quarters of voters rejected the Sovereign Money initiative. In addition, all of the country’s 26 self-governing cantons voted against it.

The initiative called for commercial banks to stop creating money each time they issue a loan. Backers of the proposal argued that by shaking up the traditional financial system, it can ensure that the Swiss National Bank (SNB) is the only one that produces new money in Switzerland. In addition, only a portion of bank deposits would be backed by central bank notes, coins and bank deposits.

But many had concerns about the potential risks to the Swiss economy, including the Swiss government, which said it was pleased with the initiative’s rejection.

“Implementing such a scheme, which would have raised so many questions, would have been hardly possible without years of trouble,” said Finance Minister Ueli Maurer. “Swiss people in general don’t like taking risks, and … the people have seen no benefit from these proposals. You can also see that our banking system functions … the suspicions against the banks have been largely eliminated.”

Last month, Jean-Marc Decressonniere, the director of the Freie Gemeinschaftsbank, a small bank in Basel, became one of few in the industry to voice support of the initiative.

“In [the] future, it would be more sensible to have money administered by a central authority that is independent and looks at the whole economy,” he said. “Commercial banks have a more limited perspective based on their own profit targets.”

But in addition to the Swiss government, opposition also came from the SNB and business groups.

“We are pleased, as this would have been an extremely damaging initiative,” said Heinz Karrer, president of business lobby Economiesuisse.

The SNB also said the initiative would have made it much harder to control inflation in the country.

“With conditions now remaining unchanged, the SNB will be able to maintain its monetary policy focus on ensuring price stability, which makes an important contribution to our country’s prosperity,” it said in a statement.

Wellington and York Partners Taipei Taiwan: EMERGING MARKETS-Surge in U.S. yields drives emerging markets into a tailspin
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Emerging market assets fell across the board on Thursday after a surge in U.S. bond yields dimmed the attraction of high-yielding currencies and stocks, with the Indian rupee sliding to a new record low.

A booming U.S. economy has prompted multiple interest rate rises by the U.S. Federal Reserve this year, boosting the dollar and sending Treasury yields to multi-year peaks.

The MSCI index for emerging currencies fell about 0.6 percent, headed for its worst day since Aug. 13.

Emerging stocks dropped nearly 2 percent, set for their worst day in more than six months led by declines for India’s main stock indexes .

Main stock indexes in South Korea, Russia and Turkey all weakened.

“A simple dynamic is playing out in the global economy right now – the U.S. is booming, while most of the rest of the world slows or even stagnates,” said HSBC economist Kevin Logan.

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“A Federal Reserve that is raising rates to prevent the U.S. economy from overheating is constraining the policy options of countries where financial conditions are tightening and trade tensions intensifying.”

Russia’s rouble weakened 0.6 percent, despite oil prices holding near four-year highs.

Britain accused Russian military intelligence of directing a host of cyber attacks aimed at undermining Western democracies by sowing confusion in everything from sport to transport and the 2016 U.S. presidential election.

“The correlation between rouble and oil has now lessened… it is a bit more tied up with general EM risk sentiment tied into the biggest drivers – any kind of news on the sanctions front,” said Paul Fage, senior emerging markets strategist at TD Securities in London.

The Turkish lira continued its slide a day after data showed annual inflation surged to nearly 25 percent in September, its highest level in 15 years.

The Indian rupee plumbed record lows to hit 73.8125 to the dollar. Rising oil prices have added to the currency’s woes, with investors raising bets that the central bank would hike interest rates on Friday more aggressively than earlier expected.

The losses came despite early intervention by the central bank to stop the rupee from hitting 74 per dollar, a trader said.

Central European currencies also came under pressure against the euro, with Hungary’s forint leading losses in the region.

Polish zloty was seen making little headway after the central bank governor Adam Glapinski reaffirmed that he saw no need to change interest rates until the end of 2019. The bank kept borrowing costs at a record low of 1.50 percent on Wednesday.

For GRAPHIC on emerging market FX performance 2018, see tmsnrt.rs/2egbfVhFor GRAPHIC on MSCI emerging index performance 2018, see tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Sruthi Shankar and Aaron Saldanha in Bengaluru, additional reporting by Wayne Cole in Sydney; Editing by Janet Lawrence)

Wellington and York Partners Taipei Taiwan: As trade war concerns escalate, top market experts say this is the best place to put your money

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Trade tensions have heated up between the United States and China as the Trump administration plans to implement yet another round of tariffs on the world’s second-largest economy. While the major U.S. indices have largely shrugged off the volatile negotiations — the Dow and SandP 500 are trading at record highs — top market watchers say there’s still growth potential overseas.

“We feel like [the EEM has] borne the brunt of these trade negotiations so far and valuations there look really attractive on a price-to-cash flow basis,” said Tracie McMillion, head of Global Asset Allocation Strategy at Wells Fargo Investment Institute.

The EEM Emerging Markets ETF has tumbled nearly 10 percent since January, with declines fueled by concerns of a global economic slowdown and rocky trade discussions. However, McMillion also noted that while large-cap U.S. stocks may still have some upside left, the group has largely maxed out their gains for the year.

“Should we see any progress in these trade talks with China that sentiment towards emerging markets could also change and that could be a nearer-term catalyst,” she said Tuesday on CNBC’s “Squawk on the Street.”

Strong earnings and a surging economic backdrop have pushed nearly $170 billion into U.S. ETFs and out of international funds this year, according to Tom Lydon, president of Global Trends Investments and editor of ETFtrends.com. However, Lydon said the rotation out of global investment funds — like the EEM — have now made the group more attractive on a valuation basis.

Kathryn Rooney Vera, BullTick Capital Markets head of research and chief markets strategist, said that while international currencies have been “really beaten up lately” the group has seen a recovery of late and are beginning to look like a buy.

However, as U.S. businesses have helped push the major indices to new records, Grant Bughman, senior equity specialist at UBS Asset Management, said the markets would see even more gains if trade negotiations stabilized.

“You look at 2019, obviously the growth rate is going to come down as the year over year,” he said Tuesday on CNBC’s “Power Lunch.” “I think the baseline view for us and many other investors is that it’s a negotiating tactic, and I think that cooler heads will prevail in the White House to not employ a lot of the tariffs as they’re kind of tweeted about day to day.”

For those who seek a more cautious investment strategy altogether, Lisa Erickson, head of traditional investments group at US Bank Wealth Management suggests staying put in U.S. equities. Erickson cautioned on CNBC’s “Power Lunch” that investors should take a “wait and see” attitude as trade discussions pan out.

Wellington and York Partners Taipei Taiwan: Singapore not most expensive city after considering taxes

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Singapore has topped the Economist Intelligence Unit's annual Worldwide Cost of Living Survey for five consecutive years. But in the latest tax-adjusted Worldwide Cost of Living Index for top earners, calculated by international trust and corporate s
Singapore has topped the Economist Intelligence Unit’s annual Worldwide Cost of Living Survey for five consecutive years. But in the latest tax-adjusted Worldwide Cost of Living Index for top earners, calculated by international trust and corporate services provider Sovereign Group, Singapore is 11th. Seoul is Asia’s most expensive city, ranking sixth.

Ranking takes into account not just prices of goods and services, but also income tax rates
Singapore may be ranked the most expensive city to live in by the Economist Intelligence Unit (EIU), but a different ranking shows that this is hardly the case after accounting for personal income tax rates.

Instead, Singapore comes in 11th in the latest tax-adjusted Worldwide Cost of Living Index for top earners, calculated by international trust and corporate services provider Sovereign Group. Seoul is Asia’s most expensive city, ranking sixth.

For average earners, Singapore ranks a more modest 13th, coming behind other Asian cities such as Tokyo (ninth), Osaka (10th) and Seoul (12th).


Topping both rankings globally is Denmark’s capital Copenhagen, with Paris and Tel Aviv rounding out the top three for top earners, and Reykjavik and Geneva for average earners.

Singapore has topped the EIU’s annual Worldwide Cost of Living Survey for five consecutive years. The EIU survey is meant to help businesses calculate compensation packages for overseas staff postings.

Sovereign’s index intends to do the same. However, it takes into account not just the comparative prices of goods and services in cities, but also “how much an individual living and earning in a city would need to earn to afford these goods and services after paying local taxes on their earned income”.

11th
Singapore’s ranking in the latest tax-adjusted Worldwide Cost of Living Index for top earners, calculated by international trust and corporate services provider Sovereign Group.
13thRanking for or average earners; Singapore came behind other Asian cities such as Tokyo (ninth), Osaka (10th) and Seoul (12th).
In its report, Sovereign gave the following illustration: If a gin and tonic costs US$10 (S$13) in Los Angeles but the local tax rate is 50 per cent, a worker must earn US$20 to purchase it.

That same gin and tonic might cost US$15 in the Cayman Islands where there is no personal income tax, so a worker in the capital George Town would need to earn only US$15 to buy it.

“By this measure, the gin and tonic is cheaper in the Cayman Islands than in Los Angeles,” concluded the report.

Sovereign’s adjusted rankings for top earners were calculated by taking a city’s EIU score and multiplying it by the city’s top rate of personal tax on earned income.

For average earners, the “all-in tax” rate was used instead.

This refers to income tax as well as social security contributions as a percentage of gross wage earnings.

Wellington and York Partners Taipei Taiwan: Charles Schwab: Don’t Count Out Emerging Market Stocks
on Wellington and York Partners Taipei Taiwan: Charles Schwab: Don’t Count Out Emerging Market Stocks
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Emerging markets were all the rage last year, with the MSCI Emerging Markets Index lodging 37% gains. And while investors probably expected more of the same to happen this year, many are now unloading their positions as emerging market stocks underperform.

Although emerging market equities may be down, Charles Schwab‘s chief global investment strategist Jeffrey Kleintop argued that investors shouldn’t count them out, even if the MSCI Emerging Markets Index is roughly 10% lower than its high posted in January. “Emerging market stock relative performance may depend on the environment: mid-cycle or late-cycle,” wrote Kleintop in a blog post, arguing that, during mid-cycle periods, emerging market stocks suffer and underperform their developed market rivals. But in the late stage of the cycle, emerging markets tend to outperform.

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The strategist from The Charles Schwab Corporation (SCHW) pointed to instances in the past when emerging market investments were down and out, which included the Mexican peso crisis in 1994, the “Asian Contagion” in 1997 and the “Taper Tantrum” of 2013. In all three of those cases, the Federal Reserve started taking actions to tighten monetary policy. And while the moves didn’t prompt a global or U.S. recession, they did hurt emerging market stocks because of the dependence on borrowing in dollars.

With many market watchers calling the current environment the late stage of the economic cycle, emerging market stocks could improve, as they have historically outperformed in that stage. “Investors viewed the current environment as a characteristically late-cycle environment, which have historically been favorable to emerging market stocks,” wrote the Schwab market strategist. “Late-cycle environments have led to outperformance by emerging markets in the past, including the years before the yield curve inverted in 1989, 2000 and 2006.”

For months now, Schwab has been referencing the late stage of the economic cycle, with the brokerage’s chief market strategist Liz Anne Sonders saying in an interview with Investopedia in November that signs are picking up of a late stage in the cycle. She pointed to moves on the part of the Federal Reserve to clamp down on its monetary policy and end the stimulus package that it kicked off on the heels of Great Recession as late-stage characteristics. What’s more, there has been a flattening of the yield curve, productivity boosts and an increase in capital spending. “We’re starting to check off some of the boxes that suggest we are getting into that late cycle, but not many of them yet are suggesting we are near the peak in the cycle,” Sonders said at the time.