SNB & CHF

The 1MDB scandal has seen billions disappear from the sovereign wealth fund. The Swiss financial regulator has concluded its investigations into the Malaysian 1MDB scandal by finding Rothschild Bank AG and one of its subsidiaries in serious breach of anti-money laundering regulations. The Swiss Financial Market Supervisory Authority (FINMA) said on Friday that it has appointed an auditor to make sure the bank and its...

See the introduction and the video for the terms gold basis, co-basis, backwardation and contango. Regulated to Death The price of gold fell $13, and that of silver $0.23. Perspective: if you’re waiting for the right moment to buy, the market now offers you a better than it did last week. If you wanted to sell, this wasn’t a good week to wait. Which is your intention, and why? Obviously, last week the sellers were more...

US equities and the dollar appear to be moving higher together. The greenback is near its best level this year against most of the major and emerging market currencies. The Chinese yuan is not an exception to this generalization. At the same time, the S&P 500 is at its best levels since the downdraft February, and the NASDAQ set a new record high earlier in the week. Many investors and observers speculate about the...

Swiss Franc The Euro has risen by 0.19% to 1.1651 CHF. EUR/CHF and USD/CHF, July 20(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The US dollar is little changed but mostly softer as the week draws to a close. The market is digesting the implications of yesterday’s comments by President Trump about interest rates and foreign exchange, and without fresh economic data, are...

Despite heightened trade tensions, the Swiss franc has been relatively weak against the US dollar of late. The defensive features of the franc seem to be outweighed by an unsupported interest rate differential. But the continuing threat of escalation in trade disputes and extreme short speculative positioning on the franc mean the latter has upside potential. Capital outflows are unlikely to weigh significantly on...

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners. Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade...

This will be a fairly quick update as I just posted a Mid-Year Review yesterday that covers a lot of the same ground.  There were, as you’ll see below, some fairly positive reports since the last update but the markets are not responding to the better data. Markets seem to be more focused on the trade wars and the potential fallout. I would also note that at least some of the recent strength in the data is related to...

With the first half of 2018 now behind us, it’s an opportune time to look at whats been happening in the Chinese Gold Market. As a reminder, China is the largest gold producer in the world, the largest gold importer in the world, and China’s Shanghai Gold Exchange is the largest physical gold exchange in the world. For various reasons such as cross-border trade rules, VAT rules and deep liquidity, nearly all physical...

A Swiss-US agreement allows wrongdoers to settle financially to avoid criminal prosecution in the United States. The Zurich-based Neue Privat Bank (NPB) has paid $5 million (CHF5 million) fine to settle a criminal tax evasion investigation in the United States. NPB is one of a handful of so-called ‘category 1’ Swiss or Swiss-based bank branches that were still facing sanctions at the start of this year. On Thursday the...

Swiss Franc The Euro has risen by 0.03% to 1.1625 CHF. EUR/CHF and USD/CHF, July 19(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The US dollar is extending its recent gains against most of the world’s currencies. We continue to see the most compelling case for the macro driver being the diverging policy mixes. There are also more immediate factors too. The surprisingly...