SNB & CHF

Summary: China’s excess capacity is one of the most formidable challenges the China and the world face. Unexpectedly, China’s steel industry reported a profit in H1 16. M&A for industry rationalization and foreign markets seem to be the main ways China is trying to address the excess capacity. Americans have a saying about an 800-pound gorilla in a room.  It refers to a person or organization so...

Swiss Franc The euro appreciated against both Swiss Franc and dollar. Swiss retail sales was again very weak, but emphasize our last month comment: The measurement of retail sales (and also GDP) ignore the active second-hand markets in Switzerland. The Swiss SVME PMI was at 50.1 close to contraction, another piece of bad data. Click to enlarge. FX Rates The US dollar is offered against the major currencies, but...

  “Bad” Monopolies? An argument against absolutely free markets comes up often. What about so-called natural monopolies? So-called infrastructure projects (e.g. sewage plants) have high barriers to entry, and are a challenge to true competition. Therefore, if left to private companies, they would become bad monopolies. So it is best for the government to provide them.  I think there are answers on several levels....

Summary: Service prices are rising, while goods prices have steadily fallen. Non-durable goods prices are stabilizing, while durable goods prices are still falling. The decline in durable goods prices is an important economic development. The rust line is service prices.  They are steadily increasing.  No deflation or disinflation here.  Think about rent, medical services, education, and entertainment. The three...

Summary: Japan’s fiscal stimulus if smaller than it appear and is unlikely to boost the economy as much as officials may think. The problem in Japan is not that interest rates are too high or that pubic investment is too weak. The risk is that the yen strengthens further, and we suggest the dollar may fall toward JPY94.60. The Japanese government is delivering the other half of its fiscal policy today....

Silver kangaroo coins have seen sales surge to over 10 million coins which is double the expected demand for the year. Silver Kangaroo Coins 1 oz (2016) Introduced to the market less than 11 months ago in September 2015 at a launch attended by GoldCore, sales of the new release Perth Mint’s 2016 Australian Kangaroo 1 ounce silver bullion coin were anticipated to reach 5 million coins in their introductory first year....

02.08.2016 09:15  – FSO, Economic Surveys (0353-1607-20) The Used Goods Question Retail sales in several countries like Germany, Italy, Japan and Switzerland continue to fall. In the United States they have strongly risen recently. We should remind readers, that used goods sold via Ebay or similar, are not contained in this statistics. Still they create economic value for the purchases. By mentality, Swiss, Germans...