Tag Archives: Featured

Despite heightened trade tensions, the Swiss franc has been relatively weak against the US dollar of late. The defensive features of the franc seem to be outweighed by an unsupported interest rate differential. But the continuing threat of escalation in trade disputes and extreme short speculative positioning on the franc mean the latter has upside potential. Capital outflows are unlikely to weigh significantly on...

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity gains, while the REER assumes constant productivity in comparison to trade partners. Who has read Michael Pettis, knows that a rising trade surplus may also be caused by a higher savings rate while the trade...

This will be a fairly quick update as I just posted a Mid-Year Review yesterday that covers a lot of the same ground.  There were, as you’ll see below, some fairly positive reports since the last update but the markets are not responding to the better data. Markets seem to be more focused on the trade wars and the potential fallout. I would also note that at least some of the recent strength in the data is related to...

With the first half of 2018 now behind us, it’s an opportune time to look at whats been happening in the Chinese Gold Market. As a reminder, China is the largest gold producer in the world, the largest gold importer in the world, and China’s Shanghai Gold Exchange is the largest physical gold exchange in the world. For various reasons such as cross-border trade rules, VAT rules and deep liquidity, nearly all physical...

A Swiss-US agreement allows wrongdoers to settle financially to avoid criminal prosecution in the United States. The Zurich-based Neue Privat Bank (NPB) has paid $5 million (CHF5 million) fine to settle a criminal tax evasion investigation in the United States. NPB is one of a handful of so-called ‘category 1’ Swiss or Swiss-based bank branches that were still facing sanctions at the start of this year. On Thursday the...

Swiss Franc The Euro has risen by 0.03% to 1.1625 CHF. EUR/CHF and USD/CHF, July 19(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The US dollar is extending its recent gains against most of the world’s currencies. We continue to see the most compelling case for the macro driver being the diverging policy mixes. There are also more immediate factors too. The surprisingly...

Volatility returned to markets with a vengeance in the first half of this year. 2018 started off as an extension of last year when volatility was almost wholly absent. Stocks roared out of the starting gate, up almost every day until January 26th. And then – whoosh. What took nearly a month to gain took just 6 trading days to give back and then some. Since that correction, the S&P 500 has traded in a range with a...

Since the beginning of the year, Bitcoin has seen its price cut in half and beyond. Other crypto assets have fallen even more. Although the king of the crypto world has rebelled from time to time over recent months, Bitcoin’s occasional price increases have always been met with follow-up downturns. The crypto market is still mainly populated by private investors. Institutional investors, especially Wall Street, are not...

Experts have warned that international cybercrime needs increased cooperation between cross-border law enforcement agencies Two people suspected of illegally obtaining and using the e-banking data of Swiss bank customers have been arrested in the Netherlands. The Swiss Office of the Attorney General says the suspects were arrested near the city of Rotterdam and premises were searched in the coordinated operation between...

Swiss Franc The Euro has fallen by 0.21% to 1.1635 CHF. EUR/CHF and USD/CHF, July 18(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The US dollar is at its best level here in July against the Canadian dollar. The CAD1.3265 area corresponds to a 61.8% retracement of the leg down in late June from almost CAD1.3390 to the recent low near CAD1.3065. The Australian dollar has...