SMI The Swiss Market Index and global stock markets failed to extend last week’s rally after the Federal Reserve and Bank of Japan left rates unchanged and gave mixed messages about the global economic outlook. Japanese Economic Stimulus Japanese shares received a short-term boost after Prime Minister Shinzo Abe’s announced plans of a 28 trillion yen ($265 billion) economic stimulus drive, including a 13 trillion...
Read More »Emerging Markets: What has Changed
Indonesian President Widodo shuffled his cabinet Egypt has requested a three-year $12 bln loan from the IMF Johannesburg Stock Exchange data on investment flows into South Africa was wrong Fitch downgraded South Africa’s local currency rating by one notch to BBB- with a stable outlook Fitch cut its outlook on Colombia’s BBB rating from stable to negative In the EM equity space as measured by MSCI, Turkey (+4.8%),...
Read More »Great Graphic: Relative Performance of Bank Stocks–US, Europe, and Japan
This Great Graphic was composed on Bloomberg, and it shows the performance of bank share indices of the major bourses. The time series are indexed to 100 at the start of this year. The green line, which is off about 6.6% this year is the MSCI US bank index. The yellow line is the MSCI European bank index. It is off 25% this year. The white line is the Topix bank shares. It is fallen 30% this year, even with...
Read More »UBS beats profit estimates as CEO pushes ahead with cost cuts
UBS Group AG beat analysts’ second-quarter profit estimates and said it’s on track to cut costs by 2.1 billion Swiss francs ($2.2 billion) through 2017, with Chief Executive Officer Sergio Ermotti struggling with a slump at the wealth management and securities-trading units. © Denis Linine | Dreamstime.com Net income slipped to 1.03 billion francs from 1.2 billion francs a year ago, the Zurich-based bank said in a...
Read More »FX Daily, July 29: Kuroda Hesitates, Yen Advances, Focus Turns to Europe and North America
Prospects for the Swiss Economy Remain Favourable The KOF Economic Barometer has only changed little and reached a value of 102.7 in July. In June, and therefore before the referendum in the United Kingdom about its membership in the EU, the KOF Economic Barometer stood at a value of 102.6 (revised from 102.4). Thus the Barometer has been standing above the historical average since February this year. Despite the...
Read More »Credit Suisse’s turnaround is working, but vulnerable
Just a month ago, Credit Suisse CEO Tidjane Thiam and Deutsche Bank CEO John Cryan risked, as one hedge fund manager put it, becoming the dead men walking of European banking as they struggled to shore up their firms’ profitability. © Simon Zenger | Dreamstime.com Thursday’s results from Credit Suisse suggest Thiam may escape that fate while Cryan’s effort to revamp the German lender stalls. After a first-quarter...
Read More »FX Daily, July 28: Dollar Pulls Back Further Post-FOMC
Swiss Franc The Swiss Franc is having a very volatile week. With the European stress tests approaching and with a bad U.S. durable goods release, the EUR/CHF is on the descent again. Data on net immigration to Switzerland has been published. The number of people who are leaving Switzerland is on the rise and the net immigration number has fallen. This is positive for the euro and negative for CHF. This decrease in...
Read More »Fasten Your Seat Belts: Tomorrow Promises to be Tumultuous
Summary: Japan reports on labor, consumption, inflation and industrial output before the BOJ meeting. ECB reports inflation and Q2 GDP and the results of the stress test on banks. US reports first look at Q2 GDP. Tomorrow could be among the most challenging sessions of the third quarter. The focus is primarily on Japan and Europe, but the US reports its first estimate of Q2 GDP. After a six-month soft...
Read More »Richard Koo: If Helicopter Money Succeeds, It Will Lead To 1,500 percent Inflation
After today’s uneventful Fed announcement, all eyes turn to the BOJ where many anticipate some form of “helicopter money” is about to be unveiled in Japan by the world’s most experimental central bank. However, as Nomura’s Richard Koo warns, central banks may get much more than they bargained for, because helicopter money “probably marks the end of the road for believers in the omnipotence of monetary policy who have...
Read More »Claudio Grass Interviews Ronald Stoeferle: Central Banks In A Lose-Lose Situation
A Fragile System Claudio Grass, Global Gold: Ronald, it is a pleasure to have the opportunity to speak with you. We’ve known each other for a very long time, both on a personal and professional level. Because of our central banks, we find our economies today operating on artificial stimulus and negative interest rates. How would you summarize the consequences of this policy? Mr. Stoeferle: I have always considered...
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