© Ekaterina Pokrovsky | Dreamstime.com Switzerland’s Federal Council, or cabinet, plans to increase the maximum annual deduction for child care costs to CHF 25,000 per child, up from CHF 12,100. This would allow parents to deduct up to this amount from their income for federal tax purposes but would not affect canton and commune taxes. Deductions could not exceed the amount spent. The plan aims to encourage more parents...
Read More »FX Daily, May 17: US Rates Edge Higher, while Dollar Turns Mixed
Swiss Franc The Euro has risen by 0.02% to 1.1821 CHF. GBP and CHF The Pound has remained fairly range bound against the Swiss Franc during the last couple of weeks as the markets appear to adopting a wait and see approach as to what might happen in the medium to long term. The Pound fell marginally during this time after the Bank of England once again decided to keep interest rates on hold at a split of 7-2 in...
Read More »Global Asset Allocation Update
The risk budget changes this month as I add back the 5% cash raised in late October. For the moderate risk investor, the allocation to bonds is still 50% while the risk side now rises to 50% as well. I raised the cash back in late October due to the extreme overbought nature of the stock market and frankly it was a mistake. Stocks went from overbought to more overbought and I missed the rally to all time highs in...
Read More »Global Turn-of-the-Month Effect – An Update
In Other Global Markets the “Turn-of-the-Month” Effect Generates Even Bigger Returns than in the US The “turn-of-the-month” effect is one of the most fascinating stock market phenomena. It describes the fact that price gains primarily tend to occur around the turn of the month. By contrast, the rest of the time around the middle of the month is typically far less profitable for investors. The effect has been studied...
Read More »FX Daily, May 16: US Yields Soften After Yesterday’s Surge
Swiss Franc The Euro has fallen by 0.40% to 1.1804 CHF. EUR/CHF and USD/CHF, May 16(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The US dollar is mixed today after the Dollar Index rose to new 2018 highs yesterday. It is being driven by rising US rates, which also punishes short dollar positions. The US 10-year yield rose seven basis points yesterday to nearly 3.10%. It...
Read More »Will the SNB raise interest rates?
The Swiss National Bank (SNB) could be moving forward in their process of raising interest rates according to current reports with the previous Q4 2019 hike predicted to become reality in Q3. This minor shift in expectations is positive for the Swiss Franc and gives the market some news to be targetting and assessing in deciding the value of the CHF. With interest rates in Switzerland having been at -0.75% since...
Read More »Government defends Swiss Post-Amazon deal
Making its way to a Swiss home near you: an Amazon package The government has defended the deal struck that will see Swiss Post delivering packages for retail giant Amazon. There is no question of preferential treatment, it said. The response by the government came in response to a parliamentary question raised by politician Olivier Feller (Liberal-Radical), querying the deal that will see Swiss Post delivering Amazon...
Read More »All The World’s A (Imagined) Labor Shortage
Last year’s infatuation with globally synchronized growth was at least understandable. From a certain, narrow point of view, Europe’s economy had accelerated. So, too, it seemed later in the year for the US economy. The Bank of Japan was actually talking about ending QQE with inflation in sight, and the PBOC was purportedly tightening as China’s economy appeared to many ready for its rebound. Operating under these...
Read More »Scorn and Reverence – Precious Metals Supply and Demand
See the introduction and the video for the terms gold basis, co-basis, backwardation and contango. Shill Alarm One well-known commentator this week opined about the US health care industry: “…the system is designed the churn and burn… to push people through the clinics as quickly as possible. The standard of care now is to prescribe some medication (usually antibiotics) and send people on their way without taking the...
Read More »Swiss Producer and Import Price Index in April 2018: +2.7 percent YoY, +0.4 percent MoM
The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015...
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