SNB & CHF

The US S&P 500 closed above 1950 for the first time since January 6.  Global equity markets are broadly higher in response.  At the same time, ahead of the G20 meeting, the world's second and third-largest economies have signaled additional stimulus will be forthcoming.   In Japan, the Abe government is reportedly considering a front-loaded supplemental budget for the start of the new fiscal year.  The disappointing CPI figures reported earlier today, with headline and core measure...

The G20 finance ministers and central bankers will meet in Shanghai starting tomorrow.   From some quarters, there is a sense of urgency.  The IMF, for example, is likely to cut its world GDP forecast of 3.4% this year.  That forecast is not even two months old.  The tightening of global financial conditions, exemplified by the sharp drop in share prices over the last six weeks is heightening anxiety among policymakers and investors alike.   The IMF has called for a strong national and...

The G20 finance ministers and central bankers will meet in Shanghai starting tomorrow.   From some quarters, there is a sense of urgency.  The IMF, for example, is likely to cut its world GDP forecast of 3.4% this year.  That forecast is not even two months old.  The tightening of global financial conditions, exemplified by the sharp drop in share prices over the last six weeks is heightening anxiety among policymakers and investors alike.   The IMF has called for a strong national and...

A confluence of factors are raising anxiety levels among investors, and it is being expressed in heightened volatility. The S&P 500 was turned back yesterday from the key 1945 level, and global equities are falling today.   The over-production of oil is set to continue to Saudi Arabia denies intentions to cut output, and the Iranians scoffed at suggestions of freezing output. API reported another large rise in US crude stocks, which points to upside risks on the consensus estimate...

A confluence of factors are raising anxiety levels among investors, and it is being expressed in heightened volatility. The S&P 500 was turned back yesterday from the key 1945 level, and global equities are falling today.   The over-production of oil is set to continue to Saudi Arabia denies intentions to cut output, and the Iranians scoffed at suggestions of freezing output. API reported another large rise in US crude stocks, which points to upside risks on the consensus estimate...

The foreign exchange market is unusually calm.  The US dollar is little changed against currencies.  While the selling pressure that took sterling below $1.39 and the euro below $1.10 has subsided, neither has been able sustain upticks.  The euro rose to $1.1040 before sellers re-emerged. Sterling was capped near $1.3965.  The dollar had slipped to almost JPY111.00 yesterday, coming within five ticks of the February 11 low, before rebounding with the recovery in US stocks and advance in...

The foreign exchange market is unusually calm.  The US dollar is little changed against currencies.  While the selling pressure that took sterling below $1.39 and the euro below $1.10 has subsided, neither has been able sustain upticks.  The euro rose to $1.1040 before sellers re-emerged. Sterling was capped near $1.3965.  The dollar had slipped to almost JPY111.00 yesterday, coming within five ticks of the February 11 low, before rebounding with the recovery in US stocks and advance in...

The concept of moral economy was first used by 18th-century thinkers trying to make sense of the rising capitalist values.  In feudal society, a "fair price" was preferred over a free price especially for the necessities of the day.   The reciprocal rights and responsibilities of feudalism let the lord set the fair price.  The British historian E. P. Thompson showed how farmers clung to this belief.  Large farmers who sold their product at a higher price elsewhere while there was some...

The concept of moral economy was first used by 18th-century thinkers trying to make sense of the rising capitalist values.  In feudal society, a "fair price" was preferred over a free price especially for the necessities of the day.   The reciprocal rights and responsibilities of feudalism let the lord set the fair price.  The British historian E. P. Thompson showed how farmers clung to this belief.  Large farmers who sold their product at a higher price elsewhere while there was some...

When considering the impact of changing currency prices on an economy, trade-weighted measures are appropriate.  The Federal Reserve has cited the dollar's appreciation as a headwind on the economy and a depressant on prices. Given the moves in the spot market, and proximity of the G20 meeting, it may be useful to review what has happen to the trade weighted measures of the major currencies. The data is from the Bank of England.  It calculates the trade-weighted indices are a broad range...