SNB & CHF

The latest Commitment of Traders report that covers the four sessions through January 19 saw speculators anticipating the continuation of the current moves.  Of the sixteen gross positions we track, only five were in reducing exposures.  Last week there was only six increased exposures.   With the benefit of hindsight, we know that something changed a day or two after the reporting period ended.  Given the magnitude of the reversal in some cases, some of these late positions were likely...

The first two and a half weeks of the new year saw persistent selling of equities, commodities, and emerging markets.  In the foreign exchange market, the dollar-bloc and sterling were crushed.  The yen was the single biggest beneficiary, and speculators in the CME are net long the yen in the futures market for the first time since late 2012.  It was as if many equity sellers returned from the year-end holidays, and got the jump start on the buyers.  Some of the selling was passive as...

ECB President Draghi made clear at yesterday's press conference that new risks have materialized and the central bank's job to reach its mandate is far from over. Current efforts may not suffice to achieve its legal prescribed mandate. Monetary policy will be reviewed and reassessed at the next meeting in March, when new staff forecasts will also be available. In his opening remarks, Draghi cited the "slightly expansionary" fiscal policy, "reflecting in particular measures in support of...

 (from my colleague Dr. Win Thin) 1) Malaysia’s central bank kept rates steady at 3.25%, as expected, but cut bank reserve ratios from 4% to 3.5%2) S&P downgraded Poland one notch to BBB+ with negative outlook3) Brazil’s central bank did a complete about-face and left rates steady at 14.25%4) Mexico may tweak its FX auction program again when it is extended this month5) Argentine officials met with IMF chief Lagarde at the World Economic Forum in Davos In the EM equity space, Russia...

Like a car ignition that finally catches after several attempts, the global markets are building on the recovery seen in North America yesterday.   Asian stocks rallied, with the Nikkei leading the way with a 5.9% rally.  More modest 1.25% gains in Shanghai Composite allowed Chinese stocks to finish the week with small gains.  Australian, Korean, and Thai shares have also finished higher on the week.  European bourses are higher, and the Dow Jones Stoxx 600 is up 2.5%.  Not only is it...

The number of people who cross the border to work in Switzerland is on the decline, but over the past few years, there has been an almost 30% increase in the number of workers who commute by plane. (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...

There have been two important reforms announced, one in the EU and other in the IMF, that many investors may have missed due to the carnage in the markets.  While the economic challenges that Europe faces remain potent, the refugee problem appears more pressing.  Tomorrow the flash January PMIs from the eurozone are expected to slip a little, but the composite will likely remain near the multi-year high matched in December.  This suggests growth is steady.  The EU prides itself on its...

ECB President Draghi has sent the euro back down into the lower end of the recent range as he gave a strong signal that additional action could be delivered as early as March, the next meeting.  The euro had approached the upper end of its range yesterday and now is slipping through $1.08. Draghi embraced and defended the ECB's action but clearly and unequivocally opened the door wide for more action. By indicating that rates will remain at current low level of lower is a signal that the...

The Asian equity markets failed to retain the early gains that had at least partially been fueled by the US equities recouping half of their losses.  The MSCI Asia-Pacific Index lost about 1.7% and finished at new 3.5 year lows.    European markets are posting minor gains, with the Dow Jones Stoxx 600 up about 0.25% after hitting 15-month lows yesterday.  The gap created by yesterday's lower opening has not been entered.  This is also true of several national bourses, including Germany's...

I had the privilege today to appear on Canada's Business News Network. It is a great source for information on the Canadian economy and markets.  I was interviewed by Michael Hainsworth.   We discuss the Bank of Canada's decision not to cut rates today, which seemed highly discounted in the interest rate and derivatives markets.   The market seems to have simply pushed the rate cut expectation out to the spring, by which time the Liberal government is expected to present its budget.  ...