SNB & CHF

Stock Markets EM FX ended last week on a firm note, shrugging off political risk that consumed markets earlier in the week. With US rates remaining low, the dollar remains under pressure against the majors, and so EM FX is likely to benefit also. Yet we warn investors not to jump back into EM countries that are inherently riskier, such as Brazil, South Africa, and Turkey. We continue to favor Asia in the current...

Summary: Markel said the euro was too weak, so it rallied. This is not a new position for Germany. Merkel may now tack to the left since the AfD appears to have been dispatched. Look for Weidmann to begin moderating views or becoming less antagonistic. The interruption of last week’s steady negative news stream from the US saw the dollar consolidate its recent losses.  German Chancellor Merkel’s comments...

Swiss Franc vs USD and EUR The Swiss Franc recovered a lot of the losses that came with the French elections. That political event was mostly driven by speculators that will close their positions. We expected the EUR to trade around 1.07 to 1.0750 CHF in some time. What exactly is this “some time” remains open, but is at the latest in early 2018. Many, like Thomas Flury, currency strategist at UBS, think that the...

© Alys | Dreamstime.com Tribune de Genève. After more than two years of a highly overvalued franc, relative to the euro, the currency should ease in the near term reckons Thomas Flury, senior currency strategist at UBS. He expects a euro to be worth 1.14 francs in 6 months and 1.16 within a year. Emmanuel Macron’s victory and Marine Le Pen’s defeat in the second round of France’s presidential election support this...

Links between parliamentarians in Bern and lobby groups have grown steadily in recent years, according to a study by the Universities of Lausanne and Geneva. Between 2007 and 2015, these sorts of ties between interest groups and politicians increased by 20%. Links between parliamentarians and interest groups grew by 20% between 2007 and 2015. - Click to enlarge The academic research, featured in Swiss newspaper Le...

“In the Governor’s absence I attended the meeting in Zijlstra’s room in the BIS on the afternoon of Monday, 10th December to continue discussions about a possible gold pool. Emminger, de la Geniere, de Strycker, Leutwiler, Larre and Pohl were present.”      13 December 1979 – Kit McMahon to Gordon Richardson, Bank of England Introduction A central bank Gold Pool which many people will be familiar with operated in the...

Chinese economic data for April 2017 has been uniformly disappointing. External trade numbers resembled too much commodity prices, leaving an emphasis on them rather than actual economic forces. The latest figures for the Big 3, Industrial Production, Retail Sales, and Fixed Asset Investment, unfortunately also remained true to the pattern. Industrial Production had seemingly accelerated in March, rising to a 7.6%...

Selling in May, With Precision If you “sell in May and go away”, you are definitely on the right side of the trend from a statistical perspective: While gains were achieved in the summer months in three of the eleven largest stock markets in the world, they amounted to less than one percent on average. In six countries stocks even exhibited losses! Only in two countries would an investment represent an interesting...

Summary China’s government approved the creation of a bond link between Hong Kong and the mainland. S&P upgraded Indonesia one notch to investment grade BBB- with stable. Fitch revised the outlook on Vietnam’s BB- rating from stable to positive. Egypt will announce a package of social spending soon. Moody’s changed the outlook on Poland’s A2 rating from negative to stable. Brazil press reported that meat-packing...

Zurich – © Europhotos | Dreamstime.com Six Swiss regions make the top ten most prosperous regions of Europe measured in terms of GDP per person, according to an analysis by the University of Lausanne. The six Swiss regions are Zurich (3rd), Ticino (4th), Basel (5th), the region around Zug (6th), Bern-Solothurn (7th) and Suisse romande, Switzerland French-speaking region (8th). The only regions ranked higher were...