SNB & CHF

Summary Moon Jae-in was elected president of South Korea Philippine President Duterte named Nestor Espenilla as central bank governor Nigerian President Buhari traveled to London for a follow-up to the initial medical visit earlier this year Market expectations for 2018 inflation in Brazil rose for the first time in more than a year Peru’s central bank unexpectedly started the easing cycle with a 25 bp cut to 4.0%...

Summary: US TWI has appreciated a little since the end of Q1. The euro and sterling’s strength are exceptions to the rule. The dollar has edged up against the currencies of the US top four trading partners here in Q2. In early Asia today, the euro reached its highest level against the dollar since the US election last November.  Sterling was near seven-month highs.  It is primarily because of the strength of...

The Wrong Approach This question is no longer moot. As the world moves inexorably towards the use of metallic money, interest on gold and silver will return with it. This raises an important question. Which interest rate will be higher? It’s instructive to explore a wrong, but popular, view. I call it the purchasing power paradigm. In this view, the value of money — its purchasing power —is 1/P (where P is the price...

Swiss Franc EUR/CHF - Euro Swiss Franc, May 12(see more posts on EUR/CHF, ) - Click to enlarge GBP/CHF The pound to Swiss Franc rate has broken 1.30 this week as sterling has risen and investors confidence over the outlook for politics in the Eurozone increased. The election of Emmanuel Macron has removed the uncertainty over the increase in Europe of right-wing parties which could have threatened the...

With Monday’s financial media blasting reports about the VIX collapse to levels not seen in 24 years, going all the way back to 1993, it is worth remembering that the near record low volatility collapse of 1993 did not end well either for stocks, or for bonds, with the great 1994 bond tantrum.  Reminding us of that, and of broader implications for the cross-asset space, is SocGen’s Kit Juckes with his overnight note,...

Asbestos being removed from a Zurich tower block in 2003 (Keystone) Despite a lack of progress to limit products such as asbestos and the herbicide paraquat, Switzerland is largely pleased with the results of a summit on chemicals and hazardous waste held in Geneva. “We obtained much more than we expected,” Franz Perrez, the head of international affairs at the Federal Environment Office, told the Swiss News Agency on...

The Guessers Convocation On Wednesday the socialist central planning agency that has bedeviled the market economy for more than a century held one of its regular meetings.  Thereafter it informed us about its reading of the bird entrails via statement (one could call this a verbose form of groping in the dark). A number of people have wondered why the Fed seems so uncommonly eager all of a sudden to keep hiking rates...

I don’t think Milton Friedman would have made much of chess player. For all I know he might have been a grand master or something close to that rank, but as much as his work is admirable it invites too the whole range of opposite emotion. He was the champion libertarian of the free market who rescued economics from the ravages of New Deal socialism, but in doing so he simply created the avenue for where Economics of...

The following is an excerpt from David Enrich’s nonfiction financial and legal thriller The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History.  (Read part of the prologue here; another excerpt can be found here) This excerpt takes place shortly after the accused mastermind of the Libor scandal, Tom Hayes, is fired from his job at...

 Two weeks ago Bank of America caused a stir when it calculated that central banks (mostly the ECB & BoJ) have bought $1 trillion of financial assets just in the first four months of 2017, which amounts to $3.6 trillion annualized, “the largest CB buying on record.”  Aggregate Balance Sheet Of Large Central Banks, 2000 - 2017 - Click to enlarge BofA’s Michael Hartnett noted that supersized central bank...