Tag Archives: Featured

© Elenaphotos | Dreamstime.com Next year the canton of Geneva plans to spend CHF 9,143 million. However, forecast revenue is only CHF 8,553 million, leaving a shortfall of CHF 590 million, according to a cantonal government press release. The canton’s finances have been hit hard from both sides. Costs will rise significantly, mainly due to the bailout of the state employee pension fund (+213 million) and higher health insurance subsidies (+176 million). In addition,...

Central Banks Remain Calm, Investors Not So Much The avalanche of central bank meetings is rapidly winding down. We’ve had cuts, holds and a raise. The surprises have been minimal. Yet it didn’t prevent the inevitable knee-jerk reactions in the market. In truth, put together as a whole, we are no wiser nor better or worse off. I count that as a success. Especially because there was no projection of panic in any of the decisions. Despite on-going, and universal,...

AUD/CHF is in the midst of a sell-off which could extend beyond a 38.2% retracement for a 50% reversion.  A subsequent pull-back, however, to the resistance and another sell-off will likely make for a high probability set up. AUD/CHF is in the midst of a sell-off which could extend beyond a 38.2% retracement of the August lows to September highs,  located at 0.6715, and target the 50% retracement at 0.6674 (meeting the 2019 lows) should the markets continue to...

The Swiss National Bank has today published a focus article on its data portal entitled ‘Switzerland’s international investment position – breakdown of changes in stocks’ (data.snb.ch, Resources, International economic affairs, Focus articles). The article examines the extension of the data the SNB provides on Switzerland’s international investment position (IIP). In addition to information on the stocks in the IIP and the transactions in the financial account, the...

© Tetiana Chernykova | Dreamstime.com Switzerland’s government been grappling with the politics of extending universal tax-funded parental leave for a number of years. Some are pushing for paternity leave for fathers and others for a shared pool of parental leave, which mums and dads can apportion. There is also a popular vote working its way through the system which aims to create four weeks of paid leave specifically for fathers. Recently, Philipp Müller put...

Competing forces mean the two currencies could remain in a holding pattern for a while. The euro has remained relatively stable relative to the US dollar in the wake of the European Central Bank (ECB) and US Federal Reserve (Fed) September policy meetings. Growth and interest rate differentials, two key drivers for the EUR/USD rate, suggest things could stay this way. The growth differential (based on leading indicators) has barely budged since March after a sharp...

Jay Powell’s disastrous week is coming to a close, not yet his long nightmare. He has been battling fed funds (meaning repo) for his entire tenure dating back to February 2018. This week wasn’t the conclusion to the contest, just the latest and biggest round of it. According to DTCC, the GC repo (UST) rate came back down to 1.975% today. That’s much less than the 3.000% yesterday and 6.007% on Tuesday. As yesterday, today’s unscheduled overnight repo operation...

Swiss Franc The Euro has fallen by 0.25% to 1.0932 EUR/CHF and USD/CHF, September 20(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: A word of optimism on a Brexit deal has sent sterling to its best level in two months. Corporate tax cuts sparked a more than 5% rally in Indian stocks as the week draws to a close. The MSCI Asia Pacific Index snapped a four-day losing streak to pare this week’s decline.  Europe’s...

Current Account Key figures: Current Account: Down 2.07% against Q2/2018 to 21.3 bn. CHF of which Goods Trade Balance: Minus 1.52% against Q2/2018 to 14.24 bn. of which the Services Balance: Plus 0.85% to 4.72 bn. of which Investment Income: Minus 1.67% to 10.61 bn. CHF. Current Account Switzerland Q2 2019(see more posts on Switzerland Balance of Payments, Switzerland Capital Account, Switzerland Current Account, Switzerland Financial Account, ) Source: snb.ch...

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...