SNB & CHF

Summary: With today’s losses the Sept contract has retraced 50% of this year’s rally. The oil glut has partly been transformed into a gasoline glut. US rig count is rising and output has increased two weeks in a row. Oil Future Today’s 2.5% fall in the September light sweet crude oil futures contract extends the decline that began on June 9.   It is the third consecutive loss and the fifth loss in the past six...

See the introduction and the video for the terms gold basis, co-basis, backwardation and contango One Cannot Trade Based on the Endgame The prices of the  metals were down again this week, -$15 in gold and more substantially -$0.57 in silver. Stories continued to circulate this week, hitting even the mainstream media. Apparently gold is going to be priced at $10,000. Jump on the bandwagon now, while it’s still cheap...

Summary European bank stress test results will be released a couple hours before the US open on Friday. The focus is on Italy, but other countries’ banks may also be identified as needing capital. Within the existing rules are allowances for exceptions. Everyone wants to follow the rules. The results of the latest stress tests on European banks are expected to be released at 10:00 am CET (5:00 am ET).   The...

Anecdotal Skepticism vs. Actual Data About one month ago we read that risk parity and volatility targeting funds had record exposure to US equities. It seems unlikely that this has changed – what is likely though is that the exposure of CTAs has in the meantime increased as well, as the recent breakout in the SPX and the Dow Jones Industrial Average to new highs should be delivering the required technical signals. All...

EM ended the week on a soft note, as the dollar reasserted broad-based strength against most currencies. The FOMC meeting this week could see the Fed push back against the market’s dovish take on policy, in which case EM would be likely to remain under pressure. Idiosyncratic risk remains in play across several countries. The Turkish situation remains fluid, with the nation subject to ongoing ratings downgrades....

Summary: FOMC statement will not likely close door on September hike, though economists are more inclined for a December move. There is great uncertainty surrounding the BOJ’s outlook. We suspect odds favor tweaking assets being purchased rather than cutting rates further or dramatically increasing JPY80 trillion balance sheet expansion. European bank stress test results due at the end of the week. Contrary to...

  Time the Taskmaster DUBLIN – “Today’s money,” says economist George Gilder, “tries to cheat time. And you can’t do that.” It may not cheat time, but it cheats far easier marks – consumers, investors, and entrepreneurs. It took us a moment to understand what Gilder meant. Then we realized he’s right. Time is the ultimate limitation… the ultimate truth… the ultimate fact. You’ll recall. There are facts and there are...

Swiss Franc Currency Index The Swiss Franc continues its bad performance against the dollar index that started with Brexit. Click to enlarge. Swiss Franc Currency Index (3 years) The Swiss Franc index is the trade-weighted currency performance (see the currency basket) On a three years interval, the Swiss Franc had a weak performance. The dollar index was far stronger. The dollar makes up 40% of the SNB...

We critized GDP growth that in many Western economies (e.g. Greece) has become mostly an indicator of consumption and activity. We emphasized that GDP growth in the form of consumption-driven (hyper-) activity (aka Bawerk’s “GDC” Gross Domestic Consumption) must finally lead to a depreciating currency, inflation, falling government bond prices and wealth in real terms. Instead, GDP should be driven by investment and...

Speculators made several significant position adjustments in the CFTC reporting period ending 19 July. Swiss Franc Speculators reduced their long Swiss Franc position from 6.7K contracts to 4.7K contracts (against USD). The 2K was certainly smaller than the increase of 15K shorts in the euro (against USD) Euro The euro bears added to their gross short position for the fourth consecutive week and for...