SNB & CHF

Just after sunrise on April 19, 1775, a large contingent of British military troops arrived to the town of Lexington, Massachusetts. They were under orders to search for and confiscate all weapons and munitions from the colonials– something the British army had done countless times before. In many ways it was a routine operation. And yet, that morning, roughly 80 local militiamen stood blocking their path. Paul Revere had ridden through Lexington only hours before to warn residents of the...

It might not be on investors’ calendars, but European officials will take steps toward addressing two issues tomorrow.  First, the EC will make a preliminary recommendation of visa-free travel in the Schengen area for Turkish passport holders.  Second, the ECB governing council will hold a non-monetary policy meeting.  It is expected to discuss the future of the 500-euro note. In exchange for implementing previously agreed upon measures to address the refugees going from Turkey to...

The US dollar’s downtrend is extending.  The euro traded above $1.16 for the first time since last August. With Japanese markets closed for the second half of the Golden Week holidays, perhaps participants felt less hampered by the risk of intervention and pushed the dollar to almost JPY105.50.  Despite an unexpectedly large fall in the UK’s manufacturing PMI (49.2 from 50.7), sterling has pushed to its highest level in four months (~$1.4770). The Australian dollar is the main exception. ...

02.05.2016 09:15  – FSO, Economic Surveys (0353-1604-60) Retail trade turnover in March 2016 Swiss retail trade turnover falls by 2.4% Neuchâtel, 02.05.2016 (FSO) – Turnover in the retail sector fell by 2.4% in nominal terms in March 2016 compared with the previous year. This decline has been ongoing since January 2015. Seasonally adjusted, nominal turnover fell by 0.1% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO). Real...

02.05.2016 09:15  – FSO, Economic Surveys (0353-1604-60) Retail trade turnover in March 2016 Swiss retail trade turnover falls by 2.4% Neuchâtel, 02.05.2016 (FSO) – Turnover in the retail sector fell by 2.4% in nominal terms in March 2016 compared with the previous year. This decline has been ongoing since January 2015. Seasonally adjusted, nominal turnover fell by 0.1% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO). Real...

Switzerland is famous for being punctual. The trains. The buses. The meticulously crafted, hand polished luxury watches. The Swiss are so culturally punctual that they even tend to pay their taxes well in advance of the filing deadline. So it was quite a shock to hear this morning that the Swiss canton of Zug is asking its citizens to delay paying their taxes for as long as possible. Why? Negative interest rates. The cantonal government doesn’t want to take in a pile of cash, only to end...

Odd Couple While checking on the US primaries a few days ago, we came across a piece of news informing us that pretend candle-swallower Ted Cruz had picked Carly Fiorina as his “vice-presidential running mate”. Our first thought upon hearing this was “WTF”? The match made in heaven… two loooosers find each other. Photo credit: AP It’s not so much that he’s picking another “loooooser” as The Donald would put it…the real absurdity of it is that even if Cruz were to win every single one of...

This post is extremely important for understanding the differences between CPI inflation in Europe and in the U.S. “Shelter” makes up 32.8% of the U.S. CPI basket, or 42% of the core inflation rate. It is mostly driven by “Owner’s equivalent rent of primary residence”. Shelter inflation in the U.S. is 3.2% per year (March 2016), but shelter inflation is only 1% in Europe. CPI in the United States (source) in % Shelter 32.776    Rent of primary residence 5.930   Lodging away from home...

Yesterday, China announced one of the most important tax reforms of the past twenty years.  It is replacing a business tax on gross revenue for non-manufacturing companies with a VAT.   Manufacturing companies have been subject to a VAT approach for a few years.  The reform extends it from manufacturing and a few services in a pilot program to industry-wide application. It will now cover construction, real estate, finance and consumer services. The shift to the VAT is expected to reduce...

EM ended the week on a firm note, which should carry over into this week.  The biggest near-term risk to EM is the US jobs data on Friday, as the weekly claims data points to another strong gain.  Otherwise, the global liquidity backdrop remains EM-supportive. Thailand reported April CPI earlier today.  It rose 0.07% year-over-year.  The market expected another decline after the  -0.5% in March.  This is well below the 1-4% target range.  However, growth remains quite robust, averaging...