Tag Archives: Featured

Swiss Franc Speculators were net short CHF in January 2015, shortly before the end of the peg, with 26.4K contracts. Then again in December 2015, when they expected a Fed rate hike, with 25.5K contracts. The biggest short CHF, however, happened in June 2007, when speculators were net short 80K contracts. Shortly after, the U.S. subprime crisis started. The carry trade against CHF collapsed. The...

The week ahead is the busiest week of the first quarter.  It sees four major central meetings, including the Federal Reserve which is likely to raise rates for the second time in four months. The Dutch hold the first European election of the year, and the populist-nationalist party remains in contention for the top slot. The week concludes with the G20 meeting, the first that the Trump Administration’s presence will be...

Stock Markets EM FX ended last week on a firm note despite the strong US jobs data, with the dollar succumbing to some “buy the rumor, sell the fact” price action. We think the dollar should recover as the week begins, as it seems risky to be short/underweight dollars going into the FOMC meeting. With the Fed poised to hike 3 or perhaps 4 times this year, we don’t think EM FX can continue to rally the way it has so far...

  Swiss Franc Currency Index The Swiss Franc lost this week in particular against the euro, given that Mario Draghi was less dovish than expected. If the stronger euro is driven only by speculators, or also by “real money” (investments in cash, bonds, stocks) will be visible in Monday’s sight deposits release. Trade-weighted index Swiss Franc, March 11(see more posts on Swiss Franc Index, ) Source: markets.ft.com...

Unless the Federal Reserve intends to buy up every dead and dying mall in America, this is one crisis that the Fed can’t bail out with a few digital keystrokes. Just as generals prepare to fight the last war, central banks prepare to battle the last financial crisis–which in the present context means a big-bank liquidity meltdown like the one that nearly toppled thr global financial system in 2008-09. Planning to win...

We live in a non-linear world that is almost always described in linear terms. Though Einstein supposedly said compound interest is the most powerful force in the universe, it rarely is appreciated for what the statement really means. And so the idea of record highs or even just positive numbers have been equated with positive outcomes, even though record highs and positive growth rates can be at times still associated...

Today’s bland payroll report did little to suggest much of anything. All the various details were left pretty much where they were last month, and all the prior trends still standing. The headline Establishment Survey figure of 235k managed to bring the 6-month average up to 194k, almost exactly where it was in December but quite a bit less than November. In other words, despite what is mainly written as continued...

If there is still no current or present indication of rising economic fortunes, and there isn’t, then the “reflation” idea turns instead to what might be different this time as compared to the others. In 2013 and 2014, it was QE3 and particularly the intended effects (open ended and faster paced, a bigger commitment by the Fed to purportedly do whatever it took) upon expectations that supposedly set it apart from the...

Eight years after the crisis of 2008-09, central banks are still injecting $200 billion a month into the global financial system to keep it from imploding. If you want a central banker to choke on his croissant, read him this quote from socio-historian Immanuel Wallerstein: “Countries (have lost the ability) to control what happens to them in the ongoing life of the modern world-system.” Stated another way, Wallerstein...

Eight years after the crisis of 2008-09, central banks are still injecting $200 billion a month into the global financial system to keep it from imploding. If you want a central banker to choke on his croissant, read him this quote from socio-historian Immanuel Wallerstein: “Countries (have lost the ability) to control what happens to them in the ongoing life of the modern world-system.” Stated another way, Wallerstein...