SNB & CHF

We could be heading for a golden age – or a return to the 1970s The cost to the US government of borrowing money for a decade came within sniffing distance of 3% yesterday. The US ten-year Treasury yield is sitting at 2.96% as I write this morning, having got to 2.99% yesterday. Does this really matter? After all, 3% is just another number. On the one hand, you’d be right to think that. On the other, it’s not so much...

Next week’s detailed breakdown of ECB QE monthly data will reveal a marked slowdown in the pace of corporate bonds purchases in April (Corporate Sector Purchase Programme, or CSPP). Indeed, weekly holdings data have been consistent with gross purchases of around EUR3bn in April, down from EUR5.8bn on average in Q1. There are several possible explanations for the drop in gross purchases, but redemptions are not one of...

- Click to enlarge UBS shareholders approved all the Board of Directors’ proposals at today’s Annual General Meeting in Basel. Shareholders confirmed the re-election of the Chairman and the members of the Board of Directors. They elected Jeremy Anderson and Fred Hu as new members of the Board. They approved the payment of an ordinary dividend of CHF 0.65 per share, an increase compared with the previous year. They...

U.S. Mint American Eagle gold coin sales collapse to weakest April since 2007 giving contrarian value buyers another buy signal Sales of U.S. Mint American Eagle gold coins dropped to their weakest April since 2007, while silver coin purchases for the month rose 10 percent higher than last year, U.S. government data showed on Monday. The U.S. Mint sold 4,500 ounces of American Eagle gold coins in April, down 25...

Pictet Wealth Management’s latest positioning across asset classes and investment themes. Asset Allocation In spite of a certain loss of momentum in positive surprises, a strong Q1 earnings season continues to justify our bullish stance on equities in most regions. We reiterate our negative view on core government bonds and remain short duration. Volatility is still higher than last year, and has increased noticeably in...

Communication from European central banks over the last few weeks has been consistent with a more cautious stance and, in some cases, is likely to lead to delays in their monetary policy normalisation plans. Each situation is different, with a loss in economic momentum, subdued underlying inflation, and political risks playing a role to varying degrees in the euro area, the UK, Switzerland and Sweden. At the same time,...

A May Day rally in the centre of Basel in northwest Switzerland on May 1, 2018 (Keystone) - Click to enlarge Workers and activists have been celebrating May Day in Switzerland with rallies in numerous cities urging their government to address employment issues, such as equal pay. Around 50 rallies and events are planned across Switzerland. On Tuesday morning, 13,000 took part in a demonstration in Zurich...

The US jobs report was broadly disappointing. However, the Federal Reserve will look through it and investors should too. A June hike is still by far the most likely scenario. The US created 164k net new jobs in April, and when coupled with the 32k upward revision in March, it was near expectations. The source of disappointment hourly earnings. March’s 2.7% year-over-year pace was revised to 2.6%, and there it remained...

Corporate buybacks provide the key analogy for the economy as a whole. Central banks have been running a grand experiment for 9 years, and now we’re about to find out if it succeeds or fails. For 9 unprecedented years, central banks have pushed the pedal of monetary stimulus to the metal: near-zero interest rates, monumental purchases of bonds, mortgage-backed securities, stocks and corporate bonds, injecting trillions...

Meandering Prices Prices rise and prices fall.  So, too, they fall and rise.  This is how the supply and demand sweet spot is continually discovered – and rediscovered. When supply exceeds demand for a good or service, prices fall. Conversely, when demand exceeds supply, prices rise. Supply and DemandSupply and demand (the curves usually shown in such charts are unrealistic, as bids and offers in the market are...