SNB & CHF

The market's disappointment with the ECB unleashed pent-up corrective forces in the foreign exchange market.   This leg up in the dollar began in mid-October.  Through the day before the ECB, the euro was the weakest of the major currencies, losing 7.5% against the dollar.  The yen and sterling shed a little less than half as much.  The Australian dollar was the only one of the majors to have gained against the dollar.  And even then, its 0.12% appreciation had only been achieved here in...

For prisoners books have a therapeutic effect and lets them forget everything around them for a while. (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...

(from my colleague Ilan Solot) 1) The Chinese yuan will be in the SDR.  2) Brazil had one of the most important weeks of the year, and possibly of its history.  3) Russia enacted sanctions against Turkey, while Turkey got a deal from the EU.  4) Moody’s raised Russia’s credit-rating outlook to stable from negative.  In the EM equity space, China (+2.6%), Taiwan (0.0%), and Israel (+0.0%) outperformed over the last week, while Poland (-5.4%), South Africa (-4.6%), and Chile (-3.3%) have...

After the ECB's disappointment yesterday market nerves were shattered, but the largely as expected US jobs data may help the focus return to the underlying fundamental fact.  The ECB just eased policy.  Not as much as the market expected, and that speaks to market positioning, but it did ease.  And the 211k increase in November jobs, with the October series being revised up 27k to 298k,  Fed officials looking for more improvement in the labor market got it.   The unemployment rate was...

How many seats are there in the Swiss cabinet? The answer is seven. But how does Switzerland do the math to reach that figure? Is it 2+2+2+1, or 3+2+2? And why does it matter? (Michele Andina, swissinfo.ch) When modern Switzerland was founded in 1848, the Swiss cabinet consisted entirely of members from one party. A second party wasn’t represented in government until 1891. It would take another 50 years before another two were given seats. In 1959, these four largest parties agreed that...

Letterbox companies are one of the tax avoidance strategies used by some businesses. International organisations would like to see them banned. While the trend may not last for long, in Switzerland they are still setting records. (SRF/swissinfo.ch) The term letterbox companies, also known as domiciled companies, refers to businesses that establish their domicile in a tax friendly country with the aid of only a mailing address, even though the bulk of their commercial activities are...

The city of Lucerne is making war on litter - even trash dumped in the lake. (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:...

The only way to explain the largest swing in the euro in six years yesterday is to appreciate the disconnect between what was expected and what was delivered by the ECB.  Draghi's urgency and commitment to do "what it must" fanned expectations, and more importantly, substantial positions, in various asset classes--short euros, long European debt, and equities.  The washout was dramatic. Even though there was no promise by Draghi, there is nearly universal agreement that he over-promised and...

Market participants knew that volatility would rise today with the ECB meeting.  What they got was far worse than could have been anticipated.   It started with a report on the Financial Times a few minutes before the ECB's official announcement claiming, disappointingly, that there was no rate cut.  The euro took off, spiking to almost $1.07 from around $1.0550.  A few minutes later the ECB announced the ten bp cut in the deposit rate (to -30 bp).  The euro pulled back but then rallied...

The much anticipated ECB meeting is at hand.   Yesterday's disappointing eurozone CPI figures only fanned the anticipation. Today the service PMI was softer than expected at 54.2, down from 54.6.   What will Draghi do?  There are four moving parts.   The first is the deposit rate, which currently stands at -20 bp.  When first adopted in September 2014, that rate was said to be have exhausted the scope for interest rate policy.  Of course, we know factually it is not because other...