SNB & CHF

The decline in the labor force participation rate helps explain the substantial decline in the US unemployment rate over the past couple of years.  That decline has helped bring the Federal Reserve to the point that a December rate hike is thought to be extremely likely barring a significant disappointment at the end of the week with the November jobs report.   This Great Graphic was posted on Ritholtz's Big Picture Blog and was compiled by Deutsche Bank's Torsten Slok from BLS data.  ...

(from my colleagues Dr. Win Thin and Ilan Solot) This is set to be one of the most important weeks of the year. EM is likely to take a backseat between the ECB monetary policy decision, the OPEC meeting and the US jobs report. That said, there are several potential sources of idiosyncratic risk to key an eye on. There could be more headline risks from the Russia-Turkey situation. Some think that the leader of Brazilian lower house may bring forward the impeachment process this week,...

The US dollar remains firm against most of the major currencies to start what promises to be a critical week for investors.  There are two main considerations.  The first is the last minute position adjustments ahead the key events that begin with the IMF's SDR decision later today, running through the start-of the month data (especially PMIs), central bank meetings in Australia, Canada, and then the big one, the ECB.   The US monthly jobs report and the OPEC meeting cap the weeks.  The...

In this holiday-shortened week (Thanksgiving), the price of gold dropped $20 and silver 10 cents. Friday, when the price dropped the most, could not have had much liquidity as most Americans were out of work shopping or partying. Whatever they may have been buying, it sure wasn’t gold. We might be inclined to take the basis data this week with a grain of salt. Here’s the graph of the metals’ prices. The Prices of Gold and Silver We are interested in the changing equilibrium created when...

The week ahead is among the most important of the year.  Rarely is there such a confluence of events in a short period that will have far-reaching implications for investors that are known ahead of time and have been discussed so extensively.   One implications of this is that there are expectations that have been discounted by the market. The potential for sharp price gyrations and the dictates of money management should not distract from the big picture and the durable trends.  In this...

Bar a disastrous NFP print this coming Friday the US Federal Reserve will change the target range for the Federal Reserve (Fed) Bank’s Funds rate from the current level of zero – 25bp to 25 – 50bp on December 16th.  The Fed will effectively raise the overnight interbank rate of interest to around 30bp from an average of only 12bp in 2015. Ironically, that will be seven years, to the day, when the Fed first lowered rates to the current band. During the period of ZIRP madness, the Fed’s...

Anticipating a yawning divergence of monetary policy between the world's largest central banks, market participants continued to drive the dollar higher over the past week.  In fact, the greenback appreciated against all the major and emerging market currencies except the Malaysian ringgit and South Korean won.     Next week is one of the most eventful weeks of the year, and the speculative community has amassed a very large long dollar position.  It begs the question of whether the ECB...

With the ECB poised to take additional steps down the unorthodox monetary policy route, financial and economic forces are as potent as ever.  However,  there is a subtle shift taking place that few seem to recognize.  It is the re-emergence of non-economic/non-financial issues.  Since the Great Financial Crisis began, and especially since the emergence of the European debt problems, economics have been paramount in Europe.  Even political developments were understood in relation to the...

Small cable cars that provide vital transport in the mountains for farming families and hikers could soon be a thing of the past. (SRF/swissinfo.ch) Half of the 200 small lifts in Switzerland face closure, due to mounting maintenance costs. It’s down to a new law introduced in 2007, to bring Switzerland in line with the European Union. It requires that small lifts meet the same rigorous safety standards as the large mountain lift companies in popular tourism centres. While bigger companies...

The US dollar remains firm, even if it has eased from its seven-month high against the euro and five-year high against the Swiss franc recorded yesterday.  The US October personal consumption expenditure was disappointing, and prompted some downward revision to Q4 GDP forecasts. The Atlanta Fed estimates that Q4 GDP is tracking 1.8% rather than 2.3%.   However, it is not seen deterring the Federal Reserve from hiking rates next month.  The decline in the weekly jobless claims, the rise...