SNB & CHF

After much hemming and hawing since mid-year, the Federal Reserve is finally poised to raise rates for the first time in nearly a decade. Indeed, given the speeches by the leadership and the economic data, especially the labor market readings, the failure to raise rates would likely be more destabilizing at this juncture than lifting them.   Surveys of market participants suggest that a Fed hike is as done of a deal as such an event can be. A recent Reuters survey found all but one...

1. Activity increased during the Commitment of Traders reporting week ending 8 December.  There were four significant (10k+ contracts) gross currency adjustments by speculators.  Given that this period covers the second largest gain in the euro's history, it is surprising that it did not meet the threshold.  It is astounding that only that speculators added only 1.8k contracts to their gross long position   2. The bears covered 11.7k short yen contracts, leaving them 94.5k.  Both the...

The US dollar turned in a mixed performance in the week following the ECB's surprise and the healthy US jobs report.  In some ways, the greenback was like a fulcrum, not the driver.   The dollar-bloc currencies and the Norwegian krona were on one side, and the euro, Swiss franc, yen, and sterling were on the other.   The continued, and sharp drop in energy prices and commodity prices more generally, coupled with risk-off impulses spurred by equity market declines, and year-end position...

1) South African President Jacob Zuma fired Finance Minister Nene and replaced him with little-known ANZ lawmaker David Van Rooyen  2) S&P revised the outlook on South Africa’s BBB- rating from stable to negative  3) People’s Bank of China announced the publication of a new CNY basket on its website  4) Moody’s put Brazil’s Baa3 rating on review for possible downgrade  5) Brazil’s Supreme Court suspended for a week the creation of the congressional impeachment committee  6) Relations...

A behind-the-scenes look at the Swiss Federal Railways transports police video surveillance hub. (SRF/swissinfo.ch) --- swissinfo.ch is the international branch of the Swiss Broadcasting Corporation (SBC). Its role is to report on Switzerland and to provide a Swiss perspective on international events. For more articles, interviews and videos visit swissinfo.ch or subscribe to our YouTube channel: Website: http://www.swissinfo.ch Channel: http://www.youtube.com/swissinfovideos Subscribe:...

Investors, fellow central bankers, and the media continue to try to make sense of last week's ECB surprise.    We had argued that given the market positioning, especially the dramatic accumulation of speculative short euro positions since the middle of October, that the market was prone to a correction.   The issue was really one of timing.  Was it going to materialize after the ECB meeting or after the US jobs data?  Or could it wait until after the FOMC meeting. This means that there...

The US dollar is confined to narrow ranges against the euro and sterling after pushing higher yesterday.  The greenback is staging stronger upticks against the yen but is struggling to resurface above previous support in the JPY122.25 area.   Weak commodity prices and the loss of upside momentum has seen profit-taking in the Australian and New Zealand dollars.  The Canadian dollar remains heavy.  The US dollar has extended its gains to new multi-year highs.  It began the week near...

We have argued for a long time that 2016 will probably be a year of recession in the US and the Federal Reserve’s intent on raising rates will only help expedite it. We believe the current rate cycle will be short lived as the Federal Reserve is constrained by the heavy debt load weighing on the US economy. Or more specifically, the large share of unproductive and counterproductive debt that drain the US economy for resources.  Source: Federal Reserve – Financial Accounts of the United...

China was instructed by the IMF that as an operational requirement for joining the SDR that the gap between the onshore and offshore yuan (CNY and CNH respectively) needed to close.  This was important for central banks to hedge.  The opposite is taking place. That is what this Great Graphic, created on Bloomberg depicts. The yellow line is CNH.  The white line is CNY.  When PBOC facilitated a mini-devaluation in August, the spread widened out.  However, in September and October, as it...

Note; Recording contains some sound drops due to unresolved internet problems. Blake (@PipCzar) interviews Marc Chandler. Marc Chandler has been covering the global capital markets in one fashion or another for more than 25 years, working at economic consulting firms and global investment banks. Chandler attended North Central College for undergraduate work, where he majored in political science and the humanities. He holds master's degrees from Northern Illinois University and University...