SNB & CHF

EM ended last week under pressure.  With two potentially disruptive events (FOMC meeting and Brexit vote) still in play, we think that EM softness should carry over into this week.   Markets remain jittery about the June 23 Brexit vote, as a vote to leave would be very negative for risk assets such as EM.  No action is expected at the FOMC meeting Wednesday.  However, we think July remains very much in play and the FOMC...

A couple of weeks ago, the four central banks that meet in the coming days were thought to be a big deal. Numerous Federal Reserve officials were preparing the market for a summer hike. Risks of a new downturn in Japan spurred speculation that BOJ would ease policy. On the other hand, the neither the Bank of England nor the Swiss National Bank were expected to move ahead of the UK referendum on June 23. Besides...

EUR/CHF The SNB has about 280 billion CHF in euro. Hence the loss of 2% in the EUR/CHF rate will cost the SNB around 14 billion Swiss francs.We explained that the main reason for the stronger CHF was the bad Non Farm Payrolls Report in the United States. FX Rates June 06 to June 10, 2016 click to enlarge USD/CHF As Marc explains, the dollar recovered a bit in the second part of the week. Still enough so that the...

On the Swiss Franc: Price action shows a increase of the Swiss franc after the bad US payrolls report. Commitments of traders, however, indicate a move to a short CHF position of 9600 x 100k contracts against the dollar. Chandler: “Although Swiss franc speculative position adjustment was not large, it was counterintuitive.  The market has been rife with talk of Swiss franc buying, and the euro-franc cross has fallen...

The European Union is an “empire that is hugely bureaucratic,” warns Marc Faber, telling CNBC that he thinks that “a Brexit would be bullish for global economic growth,” because “it would give other countries incentive to leave the badly organized EU.” The Gloom, Boom & Doom-er explained that Brexit is a risk Britain should be willing to take, and that it would not be a disaster, “on the contrary, it would be the...

Swiss Franc Once again, CHF is one of the strongest performers on the FX market. Next Monday we will report how much the Swiss National Bank had to intervene in our regular “Weekly SNB sight deposits” report. See the Dukascopy Video FX Rates The US dollar weakened in the first half of the week as participants continued to react to the shockingly poor jobs report and shift in Fed expectations. However, it...

Well that escalated quickly…All-time highs within reach… everything is awesome…wait what… Quite a week: Gold +5.25% in last 2 weeks – best run in 4 months Silver +5.65% this week – best week since May 2015 Copper -4% this week to lowest weekly close since January Sterling -2.5% in last 2 weeks – worst drop in 3 months US Dollar Index +0.6% – up 7 of last 9 weeks 30Y Yields -21bps in last 8 days – best rally in 4...

Well that escalated quickly…All-time highs within reach… everything is awesome…wait what… Quite a week: Gold +5.25% in last 2 weeks – best run in 4 months Silver +5.65% this week – best week since May 2015 Copper -4% this week to lowest weekly close since January Sterling -2.5% in last 2 weeks – worst drop in 3 months US Dollar Index +0.6% – up 7 of last 9 weeks 30Y Yields -21bps in last 8 days – best rally in 4...

China granted US asset managers a CNY250 bln ($38 bln) quota under the existing QFII system Bank of Korea surprised the market by delivering a 25 bp rate cut to 1.25% Oman issued its first global bond since 1997 Polish President Duda softened his CHF loan conversion plan Central Bank of Russia resumed its easing cycle with a 50 bp cut to 10.5% There appears to have been a significant change in FX strategy from the...

Beyond Human Capacity Distilling down and projecting out the economy’s limitless spectrum of interrelationships is near impossible to do with any regular accuracy.  The inputs are too vast.  The relationships are too erratic. Quite frankly, keeping tabs on it all is beyond human capacity.  This also goes for the federal government.  Even with all their data gatherers and number crunchers they are incapable of...