SNB & CHF

  Insanity Rules Bond markets are certainly displaying a lot of enthusiasm at the moment – and it doesn’t matter which bonds one looks at, as the famous “hunt for yield” continues to obliterate interest returns across the board like a steamroller. Corporate and government debt have been soaring for years, but investor appetite for such debt has evidently grown even more. A huge mountain of interest-free risk has...

United States EM FX ended the week on a soft note, despite the weaker than expected US retail sales report. Official concern about strong exchange rates is beginning to emerge. First it was Korea, then on Friday it was Brazil as acting President Temer said his country needs to maintain a balanced exchange rate, neither too weak nor too strong. We expect more pushback to emerge if the current rally is extended....

Seven people are in hospital with stab wounds and burns, police say, after an attack on a train near St.Gallen, Switzerland. The man set the train carriage on fire using a flammable liquid and also stabbed passengers, including a six-year-old child, police said. Details are sparse for now but The BBC reports, the suspected attacker, described as a Swiss man aged 27, was also taken to hospital after the incident near...

Summary: The GDP deflator may be just as important as overall growth for BOJ considerations and the possibility of fresh action next month. Falling UK rates and a weaker pound are desirable from a policy point of view. Dudley’s press conference may be more important than FOMC minutes. Two German state elections that will be held next month comes as Merkel’s popularity has waned. Japan Japan’s Q2 GDP: The...

Speculative position adjustments in the currency futures continued at a low pace in the Commitment of Traders report for the week ending August 9.  There were though two distinct patterns: Speculators reduced their exposure in EUR, CHF and peso. Speculator increased their exposure in JPY, GBP, CAD and NZD. Euro, Swiss Franc, Peso: Lower Exposures The first pattern is found in the euro, Swiss franc,...

Swiss Franc Currency Index The CHF index experienced its first good week since many weeks, when we compare it against the dollar index. It is up 1.25%, while the USD index lags with -0.50%. Click to enlarge. Swiss Franc Currency Index (3 years) The Swiss Franc index is the trade-weighted currency performance (see the currency basket) On a three years interval, the Swiss Franc had a weak performance. The dollar...

By Ronan Manly, BullionStar Much is written in the precious metals world about gold’s characteristics, and how the behaviour of the gold price allows gold to play the role of unique financial asset that retains its purchasing power over time, acts as a safe haven, diversifies risk, and provides hedging benefits. However, much of the material written in this area skips over an explanation of how the simple yet powerful...

S&P upgraded Korea a notch to AA with a stable outlook Voters passed the constitutional referendum in Thailand by a wide margin The IMF and Egypt have reached a staff-level agreement on a 3-year $12 bln loan program Argentina’s central bank will begin using a new overnight rate to manage monetary policy Political uncertainty has returned to Brazil In the EM equity space as measured by MSCI, Colombia (+6.3%),...

Swiss Franc The weak U.S. Retail Sales report let the euro improve against the dollar. We would have expected a stronger franc, given that the German growth was stronger (see more on the relationship between the German economy and CHF). Some technical movement after yesterday’s strong fall of EUR/CHF may have prevented that. Click to enlarge. United States There is a general consolidative tone in the capital...

Swiss Franc Once again, EUR/CHF reverses in the middle of the week. A part from technical reasons, the weak French CPI (+0.4% YoY) and Italian CPI (-0.2% YoY) exercised downwards pressure on the euro. Click to enlarge. FX Rates The US dollar has found steadier footing today after trading heavily yesterday.  There are two main themes.  The first is sterling’s heavy tone.  After closing the North American session...