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© Denis Linine | Dreamstime.com Broadly, Switzerland’s agricultural sector costs the country CHF 19.9 billion while contributing only CHF 3.4 billion, concludes a study published by the think tank Avenir Suisse. The CHF 19.9 billion cost the report’s authors calculate is made up of tax breaks and direct federal and cantonal payments to the sector (4.9b), the cost of artificially inflated consumer prices due to import...

Mario Draghi doesn’t have a whole lot going for him, but he is at least consistent – at times (yes, inconsistent consistency). Bloomberg helpfully reported yesterday how the ECB’s staff committee that produces the econometric projections has recommended the central bank’s Governing Council change the official outlook. Since last year, risks have been “balanced” in their collective opinion. Given what’s happened this...

Swiss Franc The Euro has fallen by 0.04% at 1.1277 EUR/CHF and USD/CHF, September 14(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The dollar traded above JPY112 in early Asia, for the first time since early August but it could not take out the high recorded then (~JPY112.10) and has come off a bit in Europe. There is a $493 mln option struck at JPY112 that will expire...

The main risk facing ECB watchers is that the next few meetings of the Governing Council will be increasingly boring and predictable. However, from the central bankers’ perspective, this may considered a sign of success, “like a referee whose success is judged by how little his or her decisions intrude into the game itself”, to quote former BoE Governor Mervyn King. Back to the economy, downside risks stemming from...

The idea is simple. Keep costs low by flying point-to-point, thus avoiding costly hubs, use one model of aircraft to contain pilot and aircraft maintenance costs, and charge passengers for everything from coffee to checked-in luggage. Southwest Airlines was first to launch the model and copycats like EasyJet followed. First transatlantic flight of an Airbus A321LR © Airbus Now a new, yet to be named, airline plans to...

We’ve been here before. Economists and central bankers become giddy about the prospects for success, meaning actual recovery. For that to happen, reflation must first attain enough momentum. If it does, as is always forecast, reflation becomes recovery. The world then moves off this darkening path toward the unknown crazy. The problem has been that officials mistake reflation for what it is. Each time they believe it...

Swiss Franc The Euro has risen by 0.27% at 1.1312 EUR/CHF and USD/CHF, September 13(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The euro has fallen on ECB meeting days this year and the last two meetings in 2017. The euro is trading in the upper end of the $1.1525-$1.1650 trading range. The intraday technicals suggest that the $1.1600 area may hold until at least the...

The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015...

Neither small business nor the bottom 90% of households can afford this “best economy ever.” After 10 years of unprecedented goosing, some of the real economy is finally overheating: costs are heating up, unemployment is at historic lows, small business optimism is high, and so on–all classic indicators that the top of this cycle is in. Financial assets have been goosed to record highs in the everything bubble.Buy the...

In a ranking of 170 media brands, Facebook had the lowest credibility. The Swiss appear to be switching off from social media, according to a survey, which suggests that the image of Facebook and Twitter have taken a hit. Some 55% of the Swiss population used social media in 2017, down 4% compared with a year earlier, a media brand study for the consultancy firm Publicomexternal link revealed. The report, published on...