SNB & CHF

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 its overvaluation. The Swiss PPI values of -6% in 2015 (see below), compared to -3% in Europe or -1% in...

Luxury brands are weathering the storm better than the rest. Keystone The coronavirus crisis could eliminate up to 100 Swiss watch brands from the market, according to an expert interviewed by the German-language weekly NZZamSonntag. Production came to a standstill during the pandemic and the most important export markets collapsed. Whether tourists with purchasing power will return to Switzerland remains in question. The watch industry, notes the newspaper, has been...

© Christian Heinz | Dreamstime.com A majority of Switzerland’s parliament voted in favour of introducing a tax on flights departing from Switzerland. 132 voted in favour of the tax, with 65 against. The tax would range from CHF 30 to CHF 120 depending on the distance and class of travel, according to 20 Minutes. Private flights would be taxed too. A tax of between CHF 500 and CHF 5,000 would be charged depending on the type and size of aircraft. Parliament also voted...

So what do we know with any sort of certainty about the claim that “the pandemic is over”? Very little. Is the pandemic over in China, Europe, Japan and the U.S./Canada? Is the much-anticipated V-Shaped economic recovery already baked in, i.e. already gathering momentum? The consensus, as reflected by the stock market (soaring), the corporate media and governmental easings of restrictions seems to be “yes” to both questions. But science is not a consensus-based...

(Disclosure: Some of the links below may be affiliate links) TransferWise and Revolut offer services that are quite similar. They are both offering cheap money transfers in many different currencies. How can you decide between both services? I have both cards. But, I am mostly using my Revolut card. So, many of my readers asked me why I was mainly using my Revolut card, where I could have only used my TransferWise card. Today, I am going to answer the question:...

Scandinavian welfare states continue to allure leftist onlookers across the world. The Nordic welfare model is marketed as a humane alternative to the cutthroat nature of Western capitalism. It received a massive boost when Vermont senator Bernie Sanders campaigned on emulating these countries in both of his presidential runs during 2016 and 2020. But it’s not just your typical Bernie Bro that’s obsessing over the Nordic model. Technocrats at the Organisation for...

EM and other risk assets stabilized to end the week after Thursday’s selloff, but remain vulnerable. The risks ahead are the same as before, which include a second wave of infections as well as a longer and shallower than expected recovery in global growth. The Fed’s message of low rates as far as the eye can see was balanced by Powell’s grim outlook for unemployment. The liquidity story should remain positive for EM, with the BOE expected to increase its QE this...

© Xantana | Dreamstime.com In the seven days to 12 June 2020, the number of new SARS-CoV-2 infections recorded in Switzerland was 127. A similar number of new cases was recorded in the week before (108) and the week before that (121), according to Worldinfometer.com. However, the number of deaths was up slightly when comparing the recent week (17) to the week before (2). Switzerland has come a long way since its first confirmed case in Switzerland was recorded on 24...

The Federal Reserve’s models really are the most optimistic of the bunch. With the policy meeting conducted today, no surprises as far as policies go, we now know what ferbus has to say about everything that’s happened this year. Skipping the usual March projections, what with the FOMC totally occupied at the time by a complete global monetary meltdown Jay Powell now says “we saw it coming”, the central bank staff released the calculations performed by its DSGE...