SNB & CHF

It has been long recognized by the investment community that power in Turkey was concentrated in Erdogan’s hands.  He enjoys incredible power in the ceremonial presidential post and brooks no rivals. Common among authoritarian leaders they habitually turn on hand-picked successors as they grow fearful of competitors.   This is precisely what has played out in Turkey in recent days and now has come to a head. Prime Minister Davutoglu returned from a trip to Europe and the Middle East to...

As Norway offers cash for refugees to leave, announcing that they won’t be accepting any more refugees from the EU, and Switzerland prepares its military to close down borders, the EU has seemingly had enough of every country acting as if it has any type of sovereignty left. The European Commission has announced that it is going to pull rank on everyone, and in Obama-like fashion, will be fining countries for not taking their fair share of refugees. Here is a detailed summary of all that...

Objective Reality After spending three weeks with objective truth at the ranch, we are now forced to return to the world of myths, delusions, and claptrap. Yes, we are in Buenos Aires looking at a TV! And there they are… talking about the world of politics, money, culture… the world of Facebook and CNBC… of Trump and Clinton… of ZIRP and NIRP… and of Game of Thrones. Photo credit: HBO The royal seating accommodation fought over in “Game of Thrones”. It looks decidedly uninviting – a...

In light of the Fed’s dovish tilt in March, the global liquidity outlook turned further in favor of EM.  As a result, EM extended the bounce off the January/February lows.  There’s no clear narrative as to why EM is softer this week, but it just seems to be a much-needed correction and positioning flush-out. Bottom line:  a dovish Fed (for now) should limit this sell-off, and the EM rally could resume for a while longer before turbulence returns later this year.  We expect many EM...

Earlier this week we observed that in what may be Europe’s latest mistake, the European Union is about to grant visa-gree travel to 80 million Turks: a key concession that Erdogan obtained as a result of the ongoing negotiations over Europe’s refugee crisis which has pushed Turkey into the key player spotlight. And then, overnight, the European Commission officially granted its support to a visa-free travel deal with Turkey after Ankara threatened to back out of a landmark migration deal....

CAD BGN Curncy It has been painful trying to pick a bottom of the US dollar against the Canadian dollar.  But now a 4-5 point downtrend from the secondary high in late-January is being violated today.    It is found near CAD1.2785 today.  Intraday penetration is one thing, but some models may take the signal on a closing basis only. CAD BGN Curncy The US dollar recorded the multi-year high against the Canadian dollar on January 20 a little below CAD1.47.  Since then the Canadian...

TRUMP . USPREZ16 This Great Graphic is a 90-day history of the “betting” at PredictIt that Trump becomes the new US President.  With Cruz suspending his campaign, the odds of Trump have risen just above 40%. TRUMP.USPREZ16 The US national interests and challenges to those interests do not change much from year-to-year, and this may help explain the continuity in US foreign policy (including foreign economic policy). Trump’s campaign style emphasized a break from the conventional...

There is one question many investors are asking after noting that with Cruz dropping out of the Republican primary, Trump has secured the nomination, and that is whether the dollar has turned. The greenback has extended yesterday’s reversal higher. The euro had briefly poked through $1.16 and closed on its lows a little below $1.15. Sterling peaked above near $1.4770 and finished near$1.4535 for a potential key reversal.  Despite weakness in US stocks and a sharp drop in US yields, two...

  Europe’s Political Class Under Fire All over Europe not only religious and national holidays are observed, but also a socialist holiday, which we always thought was a bit strange – and in a way quite telling (as far as we know, there is no holiday celebrating the free market). Traditionally the rank and file comrades tend to gather around their leaders on May Day, waving their party-approved banners  and dutifully applauding at the appropriate moments. Not anymeure, as Clouseau would...

  Pros and Cons The original Bethlehem Steel Works in Bethlehem, Pennsylvania. Photo via leggendaurbana.it The recent rally in commodity prices has surprised many market participants and has greatly supported the stock market’s rebound. It has also made bulls out of a number of former stock market bears, as one of its side effects was to cause an improvement in market internals. But does the rally actually make sense? As always, there are arguments both for and against the idea. We...