Tag Archives: Featured

Summary: FOMC statement will not likely close door on September hike, though economists are more inclined for a December move. There is great uncertainty surrounding the BOJ’s outlook. We suspect odds favor tweaking assets being purchased rather than cutting rates further or dramatically increasing JPY80 trillion balance sheet expansion. European bank stress test results due at the end of the week. Contrary to...

  Time the Taskmaster DUBLIN – “Today’s money,” says economist George Gilder, “tries to cheat time. And you can’t do that.” It may not cheat time, but it cheats far easier marks – consumers, investors, and entrepreneurs. It took us a moment to understand what Gilder meant. Then we realized he’s right. Time is the ultimate limitation… the ultimate truth… the ultimate fact. You’ll recall. There are facts and there are...

Swiss Franc Currency Index The Swiss Franc continues its bad performance against the dollar index that started with Brexit. Click to enlarge. Swiss Franc Currency Index (3 years) The Swiss Franc index is the trade-weighted currency performance (see the currency basket) On a three years interval, the Swiss Franc had a weak performance. The dollar index was far stronger. The dollar makes up 40% of the SNB...

Speculators made several significant position adjustments in the CFTC reporting period ending 19 July. Swiss Franc Speculators reduced their long Swiss Franc position from 6.7K contracts to 4.7K contracts (against USD). The 2K was certainly smaller than the increase of 15K shorts in the euro (against USD) Euro The euro bears added to their gross short position for the fourth consecutive week and for...

Gold versus Swiss Franc Many people think that Switzerland is related to gold due to its inflation-hedging safe-haven status. Historically this is true. With rising U.S. inflation in the 1970s gold appreciated to record-highs. So did the German Mark and even more the Swiss franc, that maintained low inflation levels. However the strong gold-CHF relationship broke from 1985 to 2007. Between 1985 and 2001: the reasons...

Swiss Franc The EUR/CHF ended lower today. Today’s data showed that Germany has stronger growth than the rest of the Eurozone. Given the strong Swiss trade ties with Germany, the Swiss franc appreciated. See more in Correlation between CHF and the German Economy Click to enlarge. FX Rates As the week draws to a close, there are three main developments in the capital markets. First, the profit-taking seen in US...

  Hyperventilating Minds “What has been will be again, what has been done will be done again; there is nothing new under the sun,” explained Solomon in Ecclesiastes, nearly 3,000 years ago. Perhaps the advent of negative yielding debt would have been cause for Solomon to reconsider his axiom.  We can only speculate on what his motive would be.  As far as our studies have shown, negative interest rates are a brave new...

The New York Times reported that the US is preparing to seize $1 bln in assets tied to 1MDB S&P downgraded Turkey a notch to BB with a negative outlook, citing political uncertainty Turkish President Erdogan declared a three-month state of emergency The Nigerian Naira weakened above 300 per dollar for the first time Brazil’s central bank signaled a longer wait until it cuts rates In the EM equity space as...

Investec Switzerland SMI last Week The Swiss Market Index is set to finish the week slightly higher as investors digest second quarter earnings reports and central bank policy announcements. Click to enlarge. Bonds Global financial markets showed resilience this week following the failed coup attempt in Turkey over the weekend.  Second quarter earnings proved to be the main drive of sentiment with...

Here’s a rough piece of calculation based on the last few years of news: When x happens, yields fall. An example of this post-GFC rule-of-thumb was Brexit and its fallout. The potential lesson from said rule is that yield hunting isn’t fun anymore, say Credit Suisse’s William Porter and team, with our emphasis: Negative (or very low) 10-year Bund yields have not been a boon for European credit markets, based on our...