SNB & CHF

This will be a mostly charted recap of where exactly in the rabbit hole of negative yielding corp bonds we are following last week’s knee-shaking sale of some brand new negative yielders by non-state owned Henkel and Sanofi. It was a first. It was exciting. From Morgan Stanley, with our emphasis: We estimate that a total of €467bln of EUR IG bonds now have sub-zero yields. Of this, €313bln of bonds are iBoxx...

13.09.2016 09:15  – FSO, Prices (0353-1608-90) The Producer Price Index (PPI) or officially named "Producer and Import Price Index" describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces...

When concerts have sold out, music fans often only find tickets online in the over-priced secondary market. Festivals and organisers have often done little about it - until now. Bern's Gurten festival has this year introduced personalised tickets. (SRF/swissinfo.ch) --- swissinfo.ch is the international branch of the Swiss Broadcasting Corporation (SBC). Its role is to report on Switzerland and to provide a Swiss perspective on international events. For more articles, interviews and videos...

Submitted by David Stockman via Contra Corner blog, The central banks have gone so far off the deep-end with financial price manipulation that it is only a matter of time before some astute politician comes after them with all barrels blasting. As a matter of fact, that appears to be exactly what Donald Trump unloaded on bubble vision this morning:  By keeping interest rates low, the Fed has created a “false stock...

See the introduction and the video for the terms gold basis, co-basis, backwardation and contango. The Cost of Carry The prices of both metals were down this holiday-shortened (Labor Day in the US) week, especially on Friday. The decline corresponded to a spike in interest rates. Of course everyone watched the action of the stock market on Friday. Whatever the proximate cause, the root is credit. When borrowing to...

Swiss Franc The EUR/CHF retreated today together with falling stock prices. Later during the European day, U.S. stocks recovered. When investors sell their stocks and move into cash, then the Swiss Franc very often appreciates. This is the safe haven effect: cash in Swiss Franc is perceived as more secure. Click to enlarge. FX Rates Stocks and bonds have begun the new week much like last week ended. Sharp losses...

12.09.2016 09:15  – FSO, Economic Surveys (0353-1608-80) The Swiss Real Estate Bubble and Rents The number of empty dwellings is an important indicator for the Swiss real estate bubble. Prices of Swiss real estate had risen by 5%-8% per year between 2009 and 2014, while rents for existing contracts are regulated and have not followed this path yet. Landlords can only introduce higher prices levels for new buildings...

EM ended last week on a soft note. Perhaps it was the North Korean nuclear test (see below).  Perhaps it was disappointment in the ECB or rising Fed tightening odds. Whatever the trigger was, EM FX weakness persisted and appears likely to carry over into this week. Indeed, as the September 21 FOMC meeting approaches, markets are likely to get even more jittery and choppy.  Just to keep things in perspective,...