SNB & CHF

Photo source: Swiss MEM After a very difficult year in 2015, the Swiss mechanical and electrical engineering industries (MEM) started to recover in 2016, with new orders rising by 9.5%. At the same time 23% of the industry made a loss on the back of high costs and a 1.8% drop in sales, says the industry association Swiss MEM. The strong Swiss franc is still a challenge for a large number of companies. Developments will...

© Elxeneize | Dreamstime.com - Click to enlarge 24 Heures. According to the bank Raiffeisen, if rents had followed the path prescribed in the Swiss Code of Obligations, they would be much lower. Their figures show that changes in interest rates have not flowed through to renters. If rents had fallen in step with mortgage interest rates they would be 40% lower than they are currently. The bank’s report stated that while...

The PCE Deflator for January 2017 rose just 1.89% year-over-year. It was the 57th consecutive month less than the 2% mandate (given by the Fed itself when in early 2012 it made the 2% target for this metric its official definition of price stability). Though there is a chance that the streak will end with the update for February, it should not go unnoticed how weak that number is given that oil prices in January were...

Summary: EC is committed to the future of Europe. Juncker presented five scenarios. Even if the populist-nationalist do not win the electoral contests, the national identity issues will continue to exert influence. Later this month, Europe celebrates the 60th anniversary of the Treaty of Rome, which established the European Economic Community.  Very near to the anniversary, which was not one of the original...

Strip away the centralized power that protects and funds cartels, and prices would plummet. The mainstream narrative is “the problem is low wages.” Actually, the problem is the soaring cost of living. If essentials such as healthcare, housing, higher education and government services were as cheap as they once were, a wage of $10 or $12 an hour would be more than enough to maintain a decent everyday life. Here are some...

The Swiss economy relies very much (and probably too much) on exports. More than half of GDP growth in 2014 was driven by the trade balance, while consumption lagged. Many consider this dependency on exports insane. In Q4/2016, export of goods fell by 3.8%, while imports remained the same; this implies a fall in GDP for the export/import component. Investment in equipment dipped, after some positive quarters....

Swiss Franc EUR/CHF - Euro Swiss Franc, March 02(see more posts on EUR/CHF, ) Source: Investing.com - Click to enlarge FX Rates The US dollar is bid against the major currencies as the combination the increased expectation of a Fed rate hike and the President’s commitment to fiscal stimulus buoys sentiment. The dollar-bloc, where speculators in the futures market, have grown a net long position, are leading the...

The Used Goods Question Retail sales in several countries like Germany, Japan and Switzerland continue to fall or they remain steady for years. In the United States they have strongly risen recently. We should remind readers, that used goods sold via Ebay or similar, are not contained in this statistics. Still they create economic value for the purchases. By mentality, Swiss, Germans or Japanese pay more attention so...

The Swiss consumption indicator by UBS shows improvements. The indicator is still distant from the highs in 2012. At the time stronger growth in Emerging Markets and the weaker franc helped the Swiss economy. The UBS consumption indicator rose from 1.38 to 1.43 points in January and continues to signal solid growth in private consumption. Swiss consumers view the economic and financial situation with considerably more...

© Ronnie Wu | Dreamstime.com - Click to enlarge In Switzerland, those who own the home they live in must add imputed rent to their income when calculating their income tax. This means owner-occupiers are taxed for living in their own homes, an odd concept for some who are new to Switzerland. In addition to paying tax on imputed rent, home owner-occupiers can deduct maintenance and mortgage interest costs from their...