SNB & CHF

Summary: The US premium over Germany is at its widest since 2006. This is despite a small reduction in odds of a hike in December. There are many forces are work, but over time, the widening differential will likely give the dollar better traction. This Great Graphic from Bloomberg shows two time series. The white line is the spread between the German two-year interest rate and the US two-year yield. The...

Central banks are currently creating the mother of all bubbles. To my view it was caused by masses of cheap labor in China that entered the global economy in the early 1990s.This reduced inflation and interest rates, while Chinese productivity continously improved, in particular when rural workers came into the cities.The mother of all bubbles will pop at the latest, when Chinese wages approach Western levels....

Following the seemingly endless procession of short-squeeze-fueling trial balloons last week – from settlement rumors to German blue-chip bailouts to Qatari investors – Germany’s Bild newspaper confirms the rumors that sparked weakness on Friday: Deutsche bank CEO John Cryan has failed to reach an agreement with the US Justice Department. John Cryan - Click to enlarge Having soared over 25% off the briefly...

Swiss Franc Last week SNB Q3 window cleaning that led to a big CHF net short position. This week this changed again. Both longs and shorts on CHF increased, but the net short position fell. During the CFTC’s Commitment of Traders week ending October 4, speculators took on risk.  Of the sixteen gross currency positions we track, speculators added to their exposure in all but five.  Bulls and bears saw...

Summary China reported lower than expected September reserve figures. Polish central bank Governor Glapinski adjusted the forward guidance. Brazil will open up development of its so-called pre-salt oil fields to foreign companies. Colombia’s referendum on the FARC peace agreement failed by a razor-thin 50.2% to 49.8% margin. In the EM equity space as measured by MSCI, Brazil (+5.3%), Czech Republic (+4.4%), and...

Flash-Crashed Earlier this morning the British Pound suddenly found itself on the receiving end of a 6% flash crash during Asian trading hours. Some of the losses have been recouped since then, but that will be of little consolation to anyone who may have been long the GBP overnight. Oops. Photo credit: Time & Life Pictures / Getty Images - Click to enlarge Now before you strike this up to some ‘fat...

Privathaftpflichtversicherungen in der Schweiz sind sehr intransparent. Oft steckt der Teufel im Detail, irgendwo in den AGB. Zum Abschluss einer neuen Versicherung sende ich diesen Fragebogen zu verschiedenen Anbietern. Bei den meisten Fragen bitte Ja oder Nein einfüllen, wenn die “generelle Deckungssumme” erstattet wird.Sollte eine reduzierte Deckungssumme anwendbar sein, dann bitte einfüllen. Die mit *...

Swiss Franc Currency Index The Franc index lost considerably in the last week, in particularly in comparison to the dollar index. Reason was the exceptionally strong U.S. ISM Non-Manufacturing Index. Marc Chandler speaks about the jobs report that is rather a lagging indicator,  but I like to focus on the leading index., the ISM.My view is confirmed by the stronger dollar that reflect the ISM index, but not the...

Swiss Franc EUR/CHF - Euro Swiss Franc, October 07 2016. - Click to enlarge FX Rates Sterling again steals the limelight. In early Asia, sterling inexplicably dropped nearly eight cents in minutes (to ~$1840), and on some platforms, may have traded below $1.1380. It almost immediately rebounded but has not resurfaced above $1.2480. Over the last couple of years,there have been a number of sudden dramatic moves...

SMI The Swiss Market Index is set to finish the week mainly unchanged, outperforming global stocks modestly while markets fluctuated on speculation that the US Fed will increase interest-rate later this year. SMI Index, October 7 - Click to enlarge Economic Data Global equity markets oscillated this week while the dollar strengthened, reflecting renewed investor concerns that the US Federal Reserve would raise...