Tag Archives: Featured

This post is a long excursion to make two simple points: The SNB is IMHO just acting in a passive way as a clearing house for (massive) capital inflows. It is not actively managing the exchange rate. A rate of increase of sight deposits of 2.5bn per week (100bn p.a.) is not extraordinary considering the need to recycle a current account surplus of 80bn p.a. Observing SNB behaviour over time, it looks to me that what the media call “currency interventions” by the SNB...

There’s been an unusual level of honesty coming out of Liberty Street of late. Not total honesty but certainly more than the usual nothing denials and dismissals. If you don’t immediately recognize the reference, that’s the street in NYC where FRBNY and its Open Market Desk resides. What is supposed to be the moneyed centered of the universe. After all, as Ben Bernanke famously threatened in November 2002, that’s the printing press. Or is it? In my own conversations...

Markets have moved into risk-off mode from a confluence of events emanating from the US Speaker of the House Pelosi formally launched a formal impeachment inquiry; DOJ inserted itself into Trump’s fight with New York state Trump’s speech to the UN General Assembly yesterday was noteworthy for its belligerence RBNZ and BOT kept rates steady, as expected; Czech is expected to follow suit The dollar is broadly firmer against the majors as risk-off impulses return to...

Swiss Franc The Euro has fallen by 0.13% to 1.0842 EUR/CHF and USD/CHF, September 25(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: Global equities and fixed income reacted to the large moves yesterday in the US when the 10-year note yield fell eight basis points, and the S&P 500 fell by 0.85%. Investors have focused on three separate developments and two of which came from President Trump’s speech at the...

The price of this “solution”–the undermining of the financial system–will eventually be paid in full. The financial storm clouds are gathering, and no, I’m not talking about impeachment or the Fed and repo troubles–I’m talking about much more serious structural issues, issues that cannot possibly be fixed within the existing financial system. Yes, I’m talking about the cost structure of our society: earned income has stagnated while costs have soared, and households...

Engaged in one of those protectionist trade spats people have been talking about, the flow of goods between South Korea and Japan has been choked off. The specific national reasons for the dispute are immaterial. As trade falls off everywhere, countries are increasingly looking to protect their own. Nothing new, this is a feature of when prolonged stagnation turns to outright contraction. While the dispute with Japan hasn’t helped, it isn’t responsible for the level...

© Ginasanders | Dreamstime.com Every year, Switzerland’s Federal Office of Public Health (FOPH) gives projections of compulsory health insurance premiums for the coming year. After years of rising premiums, many will be relieved by the small projected increases for 2020. Across all of Switzerland, the average premium is expected to rise 0.2% to CHF 315.40 a month. On average, adults will pay CHF 374.40 (+0.3%), young adults (19-25) CHF 265.30 (-2.0%) and children CHF...

Deutsche bank analysts suggest that at current spot levels, risk-reward favours longs in EUR/CHF. Key Quotes “While Brexit and trade war outcomes look like coin tosses, the impact is likely to be asymmetric as the SNB caps the left tail. While a relief rally would be fully accommodated, they would likely intervene heavily and cut the policy rate in the event of no deal.” “Last week’s change to the tiering system prepared the ground for emergency rate cuts by...

Swiss Franc The Euro has fallen by 0.03% to 1.0874 EUR/CHF and USD/CHF, September 24(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: A fragile calm hangs over the capital markets today. Equities in Asia Pacific were narrowly mixed. Japan, China, and HK advanced. India saw some profit-taking after a two-day surge in response to the unexpected corporate tax cuts but recovered in late dealings. European shares are...

Something happened in the credit market this week. A Barron’s article about it began: “There have been disruptions in the plumbing of U.S. markets this week. While the process of fixing them was bumpy, it was more of a technical mishap than a cause for investor concern.” Keep Calm and Carry On So, before they tell us what happened, they tell us it’s just plumbing, it’s been fixed, and that we should not be concerned. The article asserts that the reasons for the...