Tag Archives: newsletter

Summary: ECB may take a baby step toward the exit of extraordinary monetary policy by confirming rates are unlikely to be cut further and the risks are roughly balanced. UK election is coming down to the wire. In the US, former FBI director Comey is set to testify, and leaks of two Fed appointments overshadow mostly second-tier economic data. This week’s two main events, the ECB meeting and the UK national election...

The country needs to reform corporation tax while mitigating economic fallout. The government will consider a package of voter-friendly sweeteners, including extra child benefits, as it strives to breathe new life into controversial company tax reforms. The new proposals come less than four months after Swiss voters rejected a major overhaul of the corporation tax landscape. At the time, in February, voters felt that...

Switzerland is rarely out of the top three in competitiveness rankings - Click to enlarge The strong franc and corporate tax uncertainty have failed to dislodge Switzerland from second place in an annual ranking of the world’s most competitive economies. The alpine state was also judged by the Lausanne-based IMD business school to have the world’s eighth best digital capability. For the second year in a row,...

This Great Graphic, from Bloomberg, shows the correlation between the price of iron ore and the Australian dollar on a rolling 60-day basis over the past year.  The correlation is  a little more than 0.81. The relationship is the tightest since last August. This is purely directional. The correlation weakens considerably if we look at returns. When conducted on the basis of percentage change, the correlation drops to a...

Gold hits five-week high Reaches $1,273.74/oz, highest since April 25th Sterling recovers after UK polls point towards a hung Parliament Expected Fed-tightening capped gains 90-dead in Kabul, further signs of increasing tension in Middle East Trump expected to pull out of Paris Accord and Trump’s anti-Iran axis already feuding Yesterday gold hit $1,273.74/oz, a level not seen for five weeks. Analysts point to some...

When debt-asset bubbles expand at rates far above the expansion of earnings and real-world productive wealth, their collapse is inevitable. The Supernova model of financial collapse is one way to understand this. As I noted yesterday in Will the Crazy Global Debt Bubble Ever End?, I’ve used the Supernova analogy for years, but didn’t properly explain why it illuminates the dynamics of financial bubbles imploding....

In May 2017, the KOF Economic Barometer fell by 4.7 points (from revised 106.3 in April) to a new standing of 101.6. After a slight downward correction in the last month, the indicator’s value decreased substantially this month. However, with a standing slightly above its long-term average, the Barometer is signalling solid growth rates for the Swiss economy around its long-term average. In May 2017, the KOF...

Summary The Indonesian cabinet is discussing revisions to the 2017 state budget. The Thai central bank plans to reform some FX rules. South African President Zuma survived the no confidence vote within his own ANC. Brazil’s central bank signaled a slower pace of easing ahead after it cut 100 bp again. Moody’s cut the outlook on Brazil’s Ba2 rating from stable to negative. Stock Markets In the EM equity space as...

Every three months the rate of interest used to set Swiss rents is reviewed. If it goes down some renters have the right to request a decrease in rent. This time it dropped 0.25% to 1.50%. - Click to enlarge The interest rate used to set the reference rate was the average rate on Swiss mortgages at 31 March 2017 of 1.61% which rounds to 1.50% under the rounding rules, which round to the nearest quarter of a...

Food supplements boost milk production among dairy cows The Swiss Farmers’ Association has called on members to stop feeding dairy cows supplements that contain palm oil. The revelation has embarrassed the organisation that has been fighting against palm oil imports from Asia. Swiss public television’s (SRF) Rundschau programme has revealed that some Swiss dairy farmers feed their cows palm oil supplements to boost milk...