Tag Archives: Featured

Monetary policy report Report for the attention of the Governing Board of the Swiss National Bank for its quarterly assessment of December 2022 The report describes economic and monetary developments in Switzerland and explains the inflation forecast. It shows how the SNB views the economic situation and the implications for monetary policy it draws from this assessment. The first section (‘Monetary policy decision of 15 December 2022’) is an excerpt from the press...

The Supreme Court of the United States will hear plaintiff and defendant oral arguments for Biden v. Nebraska in February 2023. That case will determine whether the Biden administration has the constitutional authority to forgive student loan debt and thereby make taxpayers responsible for the debts that students have incurred. This past year President Biden announced that his administration would forgive federal student loans. According to the Congressional Budget...

Opponents of secession in the United States often choose from several reasons as to why no member state of the United States should be allowed to separate from the rest of the confederation. Some antisecessionists say it’s bad for national security reasons. Others oppose secession for nationalistic reasons, declaring that “we”—whoever that is—shouldn’t “give up on America.” Antisecessionists Believe Self-Determination Leads to “Bad” Laws One of the most popular...

Syngenta employees carry out research on corn in Stein, canton Aargau, in November 2021. © Keystone / Gaetan Bally Firms invested CHF16.8 billion ($18 billion) in research and development (R&D) activities in Switzerland last year, a 4% increase compared to 2019. A survey carried out by the Federal Statistical Office (FSO) and the Swiss Business Federation economiesuisse said the pharmaceutical sector was the biggest R&D investor (CHF6.2 billion, or 37% of the...

The Bank of Japan surprised everyone may lifting the 10-year yield curve cap to 0.50% from 0.25%.The BOJ also said it would increase its bond purchases to JPY9 trillion (~$68 bln) a month compared to the current JPY7.3 trillion.   BOJ Kuroda, whose term ends next April, insisted that the easy monetary policy stance will continue.   The surprise decision sent ripples across the capital markets.  Japanese stocks slumped, with the Nikkei falling about 2.5%.  Global...

We received a host of economics reports this past week; some good, others not so much. The week started with the Consumer Price Index report coming in better than expected at an increase of just 0.1% from the previous month (7.1% from a year ago), compared with respective estimates of 0.3% and 7.3%. This is great news (and the market responded in kind), as inflation continues to moderate not only here but also in Europe. US import and export prices were also both...

Switzerland plans to enact laws to prevent price manipulation and insider trading in its domestic energy markets. Energy Minister Simonetta Sommaruga unveiled the plans on Friday, saying the reforms are needed to secure Switzerland’s energy security. The proposed reforms would force energy companies to open their books to the energy regulator Elcom to give the authorities early warnings of supply problems. Insider trading and price manipulations are currently...

While many market participants are concerned about rate increases, they appear to be ignoring the largest risk: the potential for a massive liquidity drain in 2023. Even though December is here, central banks’ balance sheets have hardly, if at all, decreased. Rather than real sales, a weaker currency and the price of the accumulated bonds account for the majority of the fall in the balance sheets of the major central banks. In the context of governments deficits that...

Buildings near Kyiv destroyed by a Russian airstrike on December 14. The war in Ukraine is one factor weighing down the Swiss economy. Keystone / Oleg Petrasyuk Growth forecasts for Switzerland have been revised downwards for the current year and 2023 by the KOF Swiss Economic Institute, amid fears of a global recession and the war in Ukraine. The economists also changed their predictions for inflation. The KOF Consensus Forecast expects gross domestic product (GDP)...

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 partners decided to spend more. This is partially...