SNB & CHF

Jamie Dimon, JP Morgan ChaseBrian T. Moynihan, Bank of AmericaMichael Corbat, Citigroup Gentlemen: On Friday, I attended a digital money summit at the Consumer Electronics Show. I am writing to you to warn you about the disruption that is about to occur in banking. There are many startups (and larger companies too) that are gunning for you. Perhaps you have watched what Uber has done to the taxi business? Well, these guys are planning the same thing for the banking business. Banks used to...

I was canoeing recently.  When I looked that oar in the water, it looked bent.  It wasn't my equipment, and I am a novice.  I cursed to myself and quickly pulled the oar from the water.  I smiled.  It was not bent.  It was an optical illusion. There is a chart that is making the rounds.  It shows the S&P 500 moving in tandem with the Shanghai Composite.  I have tried to recreate the Great Graphic on Bloomberg.  It does look like a good fit. but do no be misled.  The two different...

The broad measures of the US dollar are trending higher, and former Fed Chair Bernanke recently refuted claims the US was engaged in a currency war. Many observers had thought that with its unprecedented asset-purchase program, the BOJ was engaged in a currency war.  However, the yen has been the strongest major currency over the past six months, and its export volumes are contracting on a year-over-year basis.  Not to worry.  Observers who seem almost to have a pathological...

EM starts the week under broadbased pressure.  We downplay reports of competitive devaluations under way because of China’s FX moves, however.  Many in EM in experiencing negative terms of trade shocks, and so their currencies are expected to depreciate.  We do not think any policymakers in EM want a weaker currency, as most are fighting to lend support via intervention and other means.   The multi-year EM boom has ended, and valuations across all asset classes are being adjusted.  This...

Chinese shares continued last week's plunge, with the Shanghai Composite off 5.3% and the Shenzhen Composite falling 6.6%.  Both indices closed on their lows.  With the apparenthelp of officials, the onshore yuan strengthened, though the real squeeze was in the offshore yuan, which strengthened by nearly 1%, the most in four months.   Excluding the Japanese markets that were closed for a national holiday, the MSCI Asia-Pacific Index shed about 1.8%.  However, a more stable tone has been...

No doubt, many people were excited on Thursday to see a spike in the silver price. The big news almost seemed like it would be a spike in the silver price. We were not quite so exuberant, tweeting (follow us on Twitter @Monetary_Metals): “What happened to silver supply and demand fundamentals this morning?!” We expected it to be a teaser for today’s Report. However, the silver market took back the entire price move, and more, in about 13 hours. Here is a close-up, showing Thursday morning...

Developments in China seemed to overshadow other considerations as investors returned from the New Year.  The offices were open and desks manned, yet many did not appear to be prepared to re-deploy resources.  The lack of participation helps explain last week's drama. Sellers showed up or were forced through money management practices (e.g. stop-losses or options triggered).   The buyers were not really on strike, but they do not often buy right out of the gate. There was the Epiphany...

Due to the holidays, the CFTC has been releasing its Commitment of Traders report late.  With this week's  report, the normal Friday release schedule resumes.   The latest report covers the shortened week through January 5.  It is not surprising to find that speculative position adjustments were minor.  There was only one gross position adjustment of more than 8k contracts, and that was the long yen. Speculators increased their holdings by half to 67.5k contracts from 45k.   What is...

A tumultuous start of the year saw the US dollar turn in a mixed performance.   Emerging market currencies and the dollar-bloc softened.  Sterling was in this camp, losing about 1.2% against the dollar.  On the other hand, the euro, Swiss franc, and the yen were firmer. Market positioning, the unwinding of short funding currencies and long risk assets, seemed to account for the disparate price action.   The pace of the slide in Chinese stocks and yuan, and the continued fall in oil prices...

1) Chinese policymakers introduced circuit-breakers for its equity markets on Monday, but then suspended them on Thursday2) PBOC finally fixed USD/CNY lower (albeit marginally) Friday after eight straight days of higher fixings3) Tensions have risen on the Korea peninsula after the North detonated some sort of nuclear weapon4) The State Bank of Vietnam has moved to a more market-based exchange rate5) Brazil’s former President Lula has been ordered to testify as a witness for a case...