SNB & CHF

Following the changes to its forward guidance, we have revised our forecast for ECB policy rates. Last week, the European Central Bank (ECB) announced a new long-term refinancing package for banks (called TLTRO-III) and made clear that interest rates would not be raised this year. While these measures were expected, they have come earlier than we thought. We were also taken aback by the extent of the downside revisions...

The promises cannot be met, and so society decays into warring elites and competing constituencies. There is a grand, majestic tragedy in the inevitable collapse of once-thriving states and empires: it all seemed so permanent at its peak, so godlike in its power, and then slowly but surely, too many grandiose, unrealistic promises were made to too many elites and constituencies, and then as growth decays to stagnation,...

A ‘real’ cannabis plant, which remains illegal. It’s low-THC sibling is taxed. (Keystone / Alessandro Della Bella) The Federal Administrative Court has upheld a decision by Swiss customs to tax legal marijuana leaves to the same extent as tobacco. In its decision published on Wednesdayexternal link, the St Gallen court said that “fake” marijuana – i.e. cannabis containing less than 1% tetrahydrocannabinol (THC) – was...

Swiss Franc The Euro has fallen by 0.04% at 1.1368 EUR/CHF and USD/CHF, March 13(see more posts on EUR/CHF and USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: The Brexit drama continues to command attention. A vote on leaving without an agreement will be held today, and if that fails, there will be a vote tomorrow on an extension. Meanwhile, the first increase in headline US CPI in four...

Updated SNB banknote app available Issuance of the new 1000-franc note presented a week ago begins today, 13 March. The Swiss National Bank’s ‘Swiss Banknotes’ app has now been updated to include the new note. 1000-Franc Banknotes Circulation Today - Click to enlarge The app, which has been downloaded some 110,000 times, can be obtained free of charge from the Apple (itunes.apple.com) and Google Play (play.google.com)...

We expect German growth to pick up somewhat in the second half of the year, although we expect fiscal stimulus to remain limited. Germany’s economy weakened significantly in the second half of 2018. External headwinds remain strong and, in an environment where monetary-policy ammunition remains limited, all eyes have shifted towards German fiscal policy, especially as the country has generated significant budget...

You just don’t see $4 billion monthly retail sales revisions, in either direction. Advance estimates are changed all the time, each monthly figure will be recalculated twice after its initial release. Typically, though, the subsequent revisions are minor rarely amounting to a billion. Four times that? Last month, the Census Bureau reported that retail sales during the Christmas holiday were a disaster. It was Christmas...

If interest rates rise to normal historical levels then this will collapse the everything bubble. So the central banks will try to lower interest rates into negative territory to try and maintain their ability to maintain debt servicing which are taking more and more of the pie of what's received in tax revenues. For example China's debt went from $7 trillion in 2008 to $40 trillion now. Trump is not getting any younger and my choose to throw in the towel and not run for another term in...

Swiss Franc The Euro has fallen by 0.03% at 1.1361 EUR/CHF and USD/CHF, March 12(see more posts on EUR/CHF and USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: Last minutes statements meant to clarify what many MPs find to be the most odious part of the Withdrawal Bill, the backstop for the Irish border is goosed global equity markets even though it does not seem as if the Withdrawal Bill...

You know things have really changed when Economists start revising their statements more than the data. What’s going on in the global economy has quickly reached a critical stage. This represents a big shift in expectations, a really big one, especially in the mainstream where the words “strong” and “boom” couldn’t have been used any more than they were. If you read nothing other than Bloomberg, it’s as if some alien...