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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...

See the introduction and the video for the terms gold basis, co-basis, backwardation and contango.  Fundamental Developments There were big moves in the metals markets this week. The price of gold was up an additional $21 and that of silver $0.30. Will the dollar fall further?As always, we are interested in the fundamentals of supply and demand as measured by the basis. But first, here are the charts of the prices of...

Summary: The dollar has been declining since the start of the year, but the causes have changed. The drag from US politics may be exaggerated, while European and Japanese politics are worrisome. The economic data may continue to be a drag on US yields, especially if core CPI slips again. The US dollar’s sell-off accelerated. It has been selling off since the start of the year. The first phase of the decline at...

Stock Markets EM FX ended the week on a mixed note, but still capped off a strong week overall. US data this week could challenge the market’s dovish take on the Fed. For now, though, the global liquidity outlook still seems to favor further gains in EM. Stock Markets Emerging Markets, September 11 Source: economist.com - Click to enlarge China China should report August new loan and money supply data this...

This update will be a bit shorter than usual. I’m in Miami awaiting Hurricane Irma. As of now, it looks like the eye of the storm will make landfall near Key West and continue west of us with the Naples/Ft. Myers area at risk. Or at least that’s the way it looks right now. I’ve done a lot of these storms though – I lost a house in Andrew in ’92 – and you never know what these things will do.  We are secure in a house...

Numbers of banks in Switzerland have shrunk since the financial crisis. Over half of private banks in Switzerland analysed by KPMG last year experienced net outflows of client cash. In a difficult period for finance, many could be forced to shut down or be bought out. “Implement truly radical change, or continue to see performance deteriorate.” This was the message of a study released Thursday by audit group KPMG with...

The changes would affect a range of telecoms services. Switzerland is one of the most connected countries on the planet, but mobile and internet users in still grumble about lack of choice, unwelcome cold-calling from companies, and high roaming charges when travelling abroad. The revised Telecommunications Actexternal link, sent by the cabinet to the parliament on Thursday, makes a stab at tackling some of these...

– Gold hits $1,355/oz as USD at 32-month low -concerns about Trump, US economy– Silver and platinum 2.3% and 1.2% higher in week; palladium 3% lower– Euro Stoxx flat for week – S&P 500, Nikkei down 0.65% and 2.2%– Geo-political concerns including North Korea, falling USD push gold 2.1% in week – Gold prices reach $1,355 this morning following Mexico earthquake– Safe haven demand sees gold over one year high,...

The first few days of any calendar month are now flooded with PMI data. Mostly due to Markit’s ongoing and increasing partnerships, we now have access to economic or business sentiment from and for almost anywhere in the world. It isn’t clear, however, if that is a good or useful development. For example, we can see quite plainly that there is a whole bunch of trouble brewing in Kenya. The Stanbic Bank/Markit Kenya PMI...

 Summary:  South Korea completed installation of the THAAD missile shield. Indonesia is considering issuing its first global IDR-denominated sovereign bonds. Taiwan is undergoing a cabinet shuffle. Brazil has seen some positive political developments. Brazil’s central bank signaled that the easing cycle is nearing an end and that the pace of easing will slow. Chile’s central bank boosted its growth forecasts. Stock...