SNB & CHF

The US dollar is sporting a softer profile today as the global capital markets are trying to stabilize.  Oil prices have steadied, with WTI back above $30.   Bond markets are narrowly mixed though the 10-year US Treasury is steady near 1.85%.  Asian and European equities followed US markets lower, but American equities have stabilized, and ahead of the ADP employment estimate and the ISM for non-manufacturing, S&P 500 is set to open slightly higher. The dollar continued to shed the...

The yen is the strongest currency today.  Many are still referring to it as a safe haven.  However, this strikes us as a misuse of the concept.  Investors are not flocking to the yen to find quiet place to ride out the storm.  Rather the yen's strength is a reflection of the turmoil. As we have explained the yen and euro have been used to finance the purchases of other assets.  As those assets are liquidated, the funding currency is bought back.  The dollar, euro and yen are the most...

  The EC draft proposals in response to the UK’s demands have been enthusiastically embraced by Prime Minister Cameron.  The wires quote Cameron as saying "I would opt in to EU membership on these good terms." The proposals presented by European Council President Tusk are weak on details that are still to be decided, though Cameron quickly seized upon them to claim: I have delivered commitments in my election manifesto."  It has yet to be seen if it is sufficient to convince several of...

The decline in oil and equities are lifting European bonds and Treasuries.  The US dollar is firmer against most major and emerging market currencies.   We never put much stock in last week's seemingly euphoric speculation of a deal between Russia and OPEC to support oil prices.  As the speculation is unwound, anticipation of another large US inventory build, and poor corporate earnings from energy sector are also taking a toll.  BP posted a 91% decline in Q4 earnings. Yesterday, S&P...

The Bank of Japan surprised investors last week by introducing negative interest rates.  At the World Economic Forum in Davos a couple weeks ago, BOJ Governor Kuroda appeared to deny that such a move was under consideration.  The market's focus, like ours, was on the pace by which it was expanding its balance sheet (JPY80 trillion a year).    The FAQ format may be the most effective way to explain what the BOJ did, why and the implications for investors. What did the Bank of Japan do? ...

The Bank of Japan surprised investors last week by introducing negative interest rates.  At the World Economic Forum in Davos a couple weeks ago, BOJ Governor Kuroda appeared to deny that such a move was under consideration.  The market's focus, like ours, was on the pace by which it was expanding its balance sheet (JPY80 trillion a year).    The FAQ format may be the most effective way to explain what the BOJ did, why and the implications for investors. What did the Bank of Japan do? ...

As we suspected, the current EM bounce still has some legs.  The BOJ’s surprise easing helped EM and risk end on last week on a strong note, and we expect that to carry over into this week.  Within EM, we will start to see the first readings for January.     The biggest risk perhaps is the jobs report on Friday.  Soft US data has helped push out Fed tightening expectations, but a strong reading here could put it back on the radar screen. Brazil reports December trade data on Monday. ...

Investors continue wrestling with the implications of last week's surprise rate cut by the Bank of Japan. . The yen is little changed against the dollar, near its 200-day moving average (~JPY121.50).  The euro moved from the upper end of its two-cent range last Thursday to the lower end on before the week.  The absence of follow through selling appears to have prompted some short-covering.   The $1.0880-$1.09 area may stymie the upside.  Softer Chinese data and a pullback in oil prices...

The fourth quarter 2015 earnings season is now in full swing. From what I have seen of the outstanding earnings surprises and favourable future guidance in the Grail Portfolios, there is enough thrust to propel them higher, as these three examples show. On 28 January Under Armour rose 22.6%!   On 27 and 28 January Cirrus Logic climbed 29%! From 25 January Covenant has risen 21.7%!   As of 29 January 110 stocks, or 37.4%, of the 294 stocks listed in Grail’s 5 principal portfolios have...

The price of the dollar was down 50mg gold, to 27.8mg, or if you prefer 0.04g silver to 2.18g. Why do we measure the volatile dollar in terms of gold and silver? There’s nothing else to measure it, certainly not the dollar-derivatives called euro, pound, franc, yen, and yuan. In the common tongue, gold was up $20 and silver rose 25 cents. More importantly, we want to know what happened to the fundamentals. Read on for the only proper fundamental analysis of the gold and silver markets… But...