SNB & CHF

Headlines Week April 03, 2017 We were arguing in the previous months, that the EUR/CHF is trending towards parity. There are three reasons: Continuing SNB interventions Strengthening Swiss local demand, as also visible in the GDP release. Speculators increase their dollar shorts against Euro and reduce them against CHF. The tendency of point 3 had been interrupted when the ECB appeared to be less dovish. FX Last week:...

Swiss Franc Speculators were net short CHF in January 2015, shortly before the end of the peg, with 26.4K contracts. Then again in December 2015, when they expected a Fed rate hike, with 25.5K contracts. The biggest short CHF, however, happened in June 2007, when speculators were net short 80K contracts. Shortly after, the U.S. subprime crisis started. The carry trade against CHF collapsed. The...

Stock Markets EM FX was mixed last week.  The rebound in oil helped some, such as COP, RUB, and MXN.  On the other hand, idiosyncratic political risks weighed on South Africa.   This week could pose a challenge to EM, with lots of Fed speakers, FOMC minutes, and US jobs data. Stock Markets Emerging Markets, March 29 Source: economist.com - Click to enlarge Thailand Thailand reports March CPI Monday, which is...

The macroeconomic fundamentals have not changed much in the first three months of the year.  The US growth remains near trend, the labor market continues to improve gradually, both headline and core inflation remain firm, and the Federal Reserve remains on course to hike rates at least a couple more times this year, even though the market is skeptical.  The uncertainty surrounding US fiscal has not been lifted, and it...

Stock Markets EM FX was mixed last week.  The rebound in oil helped some, such as COP, RUB, and MXN.  On the other hand, idiosyncratic political risks weighed on South Africa.   This week could pose a challenge to EM, with lots of Fed speakers, FOMC minutes, and US jobs data. Stock Markets Emerging Markets, March 29 Source: economist.com - Click to enlarge Thailand Thailand reports March CPI Monday, which is...

Swiss Franc Currency Index Weak inflation figures in the euro zone let the common currency fall against both the dollar and the Swiss franc. Still last week, the Swiss Franc index had some losses against the US dollar index. Trade-weighted index Swiss Franc, April 01(see more posts on Swiss Franc Index, ) Source: markets.ft.com - Click to enlarge Swiss Franc Currency Index (3 years) The Swiss Franc index is...

Swiss Franc Currency Index Weak inflation figures in the euro zone let the common currency fall against both the dollar and the Swiss franc. Still last week, the Swiss Franc index had some losses against the US dollar index. Trade-weighted index Swiss Franc, April 01(see more posts on Swiss Franc Index, ) Source: markets.ft.com - Click to enlarge Swiss Franc Currency Index (3 years) The Swiss Franc index is...

For the first time in 57 months, a span of nearly five years, the Fed’s preferred metric for US consumer price inflation reached the central bank’s explicit 2% target level. The PCE Deflator index was 2.12% higher in February 2017 than February 2016. Though rhetoric surrounding this result is often heated, the actual indicated inflation is decidedly not despite breaking above for once. In many ways 2.12% is hugely...

Gross Domestic Product was revised slightly higher for Q4 2016, which is to say it wasn’t meaningfully different. At 2.05842%, real GDP projects output growing for one quarter close to its projected potential, a less than desirable result. It is fashionable of late to discuss 2% or 2.1% as if these are good numbers consistent with a healthy economy. This level of advance, however, factors none of the imbalances and...

Personal Income growth in February 2017 was more mixed than it had been of recent months. Nominal Disposable Per Capita Income increased 3.73% year-over-year, while in real terms Per Capita Income was up 1.57%. For the former, that was among the better monthly results over the past year, while the latter was near the worst. The difference is still calculated inflation, where the rising oil component of every deflator...