SNB & CHF

Last week’s market action confirmed clearly its corrective trend. I cannot say more than that, because when systematic risk kicks in the good, the bad, and the ugly all suffer the same slippery fate. Clearly it prophecies a healthy renewal once this bear trend is over, but first this downward phase has to be over-done before there is a capitulation that would signal a key reversal. For now, there is not much to expect. As the market is in the grip of a profit recession on the one side, and...

Several Republican presidential candidates are floating the idea of returning to some form of a gold standard in the U.S., although none have gone into any great detail. So, how might a modern gold standard work? It’s a question that requires us to do more than just look to the past with an eye toward “restoring,” “bringing back,” or “returning to” gold-backed money. Sound money advocates need to also think creatively about how to adapt hard money principles to the current and future needs...

1) The Hong Kong dollar posted its biggest two-day decline since 1992 2) Bank Indonesia restarted its easing cycle, cutting rates for the first time since February 2015 3) Poland’s current Monetary Policy Council (RPP) held its last policy meeting 4) Poland’s president proposed a draft bill on FX loan conversion 5) Russia will reportedly cut budgetary expenditures by 10% due to low oil prices 6) Russia’s central bank has turned more hawkish 7) Argentina officials and debt holdouts met...

There are three developments today, which while not driving the market, are important for many investors.  The first are comments from German Finance Minister Schaeuble and EC President Juncker.  The second is an important development in Poland.   The third are growing problems in Greece. Schaeuble is formally acknowledging what investors have known for some time. The Schengen Agreement, which opens the internal borders in Europe, is at risk.  This agreement pre-dates EMU itself.  So how...

The Swiss air force is getting ready to launch an around-the-clock air policing operation. It was criticised as an office-hours only air force when it failed to intervene in a hijacking case involving an Ethiopian airliner two years ago. (SRF/swissinfo.ch) On several occasions in the past when Swiss air space was breached, the Swiss air force was unable to act because its pilots were off duty. That was the case in February 2014 when an Ethiopian Airlines pilot took full control of his...

The recovery of US shares and oil yesterday provided short-lived.  Asian shares were dragged lower with the help of Chinese equities.  The 3.5% fall in the Shanghai Composite today brings the year-to-date decline to a little more than 18%. Taiwan, which goes to the polls this weekend ( the opposition that has been critical of the government's pro-China policy is ahead) bucked the trend to post minor gains. European shares are also moving lower, with the Dow Jones Stoxx 600 off more than...

The US stock market and the oil market appear joined at the hip. The Great Graphic here, created on Bloomberg, shows the correlation of the two markets.  It is near 0.77, which is the highest since September 2013.   The correlation was conducted on the level of the S&P 500 and the level of the front-month light sweet crude oil futures contract.  It tells us that the two markets have been moving in the same direction nearly eight of ten sessions over the past 60 sessions.   As the...

Speculation is mounting that the Bank of Canada will be the first major central bank to cut rates this year.  It meets on January 20.  The combination of the drop in oil prices (40% since mid-October) and the erosion of the business outlook has boosted the risk of a cut next week.   The bitumen from Canada's oil sands, which is a type of crude oil, reached a low of nearly $8 earlier this week, which is a tenth of its from two years ago. Indicative pricing in the derivatives markets...

Vacherin Mont-d’Or is a Swiss speciality. But producing the cheese is not without its challenges. (SRF/swissinfo.ch) Vacherin Mont-d’Or is a seasonal cheese made from cow’s milk. It is produced in different variations, both in France and in Switzerland, in the Jura region at the border between the two countries. This type of Vacherin is produced by a handful of producers in the French-speaking canton of Vaud, between autumn and spring. A slightly soft cheese with an ripple-effect outer...