SNB & CHF

- Click to enlarge Market sentiment has improved after President Trump said China has asked to restart trade talks PBOC fixed the yuan basically flat and firmer than what models suggested The G-7 summit wraps up today with little to show for it We believe the Chicago Fed National Activity Index remains the best indicator to gauge US recession risks Germany July IFO business climate came in weaker than expected The lira experienced a flash crash against the yen...

The world of crypto assets is forecast to explode in the coming years, moving on a long way from the cryptocurrency bitcoin. The Swiss financial regulator has awarded banking and securities dealer licences to two new “crypto banks”. SEBA and Sygnum have been cleared to operate in the new world of tokenised digital securities, a major milestone for the fledging industry. At the same time, the Swiss Financial Market Supervisory Authority (FINMA) issued rules on how to...

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Everyone must ask himself the question. Do you want the world to move to an honest money system, or do you just want gold to go up (we italicize discussion of apparent moves in gold, because it’s the dollar that’s moving down—not gold going up—but we sometimes frame it in mainstream terms). Gold’s Going Up We have written about the tension between these two goals before. Many people start with the former. They come to gold, as they begin to realize that the dollar...

Swiss Franc The Euro has risen by 0.11% to 1.0873 EUR/CHF and USD/CHF, August 26(see more posts on EUR/CHF and USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: The anticipated growth implications of the heightened tensions between the world’s two largest economies is dominating activity at the start of the new week. These considerations that drove the 2.6% drop in the S&P 500 before the weekend is carrying over into today’s...

It’s the last week of August. Several economic reports will be released in the coming days. They include the US deflator of consumer expenditures that the Federal Reserve targets, China’s PMI, and the eurozone’s preliminary August CPI. It is not that the data do not matter, but investors realize the die is cast. They are looking further afield. The next US tax increase on Chinese imports goes into effect on September 1, and Beijing has threatened to retaliate. The...

A general view of a fire in the Amazon of Rondonia, Brazil “Playing with fire,” is the verdict of the Swiss press, in reaction to the free trade deal largely agreed between EFTA countries – among them Switzerland – and the Mercosur bloc, that includes Brazil. Questions have been raised over the timing of the agreement. It comes as Brazil led by strongman president Jair Bolsonaro, faces heavy international criticism, particularly from the European Union, of its...

The yield curve’s inverted! The yield curve’s inverted! That was the news I awoke to last Wednesday on CNBC as the 10 year Treasury note yield dipped below the 2 year yield for the first time since 2007. That’s the sign everyone has been waiting for, the definitive recession signal that says get out while the getting is good. And that’s exactly what investors did all day long, the Dow ultimately surrendering 800 points on the day. I don’t remember anyone on CNBC...

Risk reversals on Swiss Franc (CHF1MRR), a gauge of calls to puts, dropped to the lowest level in 17-months, indicating the investors are adding bets to position for a rise in the Swiss currency. The USD/CHF one-month 25 delta risk reversals fell to -1.41 – a level last seen in March 2018. The negative number indicates the implied volatility premium or demand for CHF calls (bullish bets) is higher than that for CHF puts (bearish bets). Notably, the gauge stood at...

Does anyone really think The Everything Bubble can just keep inflating forever? What do I mean by a profoundly shattering recession? I mean, a systemic, crushing recession that can’t be reversed with central bank magic, a recession that only deepens with time. The last real recession was roughly two generations ago in 1981; younger generations have no experience of a profound recession, and perhaps older folks have forgotten the shock, angst and bitterness. A...