Tag Archives: newsletter

14.03.2016 09:15  - FSO, Economic structure and analyses (0353-1600-90) Women and Science 2015 Under-representation of women in science greater in Switzerland than in Europe Neuchâtel, 14.03.2016 (FSO) – In Switzerland, women are outnumbered by men in the field of science and research, especially in academic careers. Only 18% of directors of higher education institutions are women. Furthermore, their participation in public and private research (for all economic sectors) is often below the...

On the week, the prices of the metals didn’t move all that much. However, the move around 6am (Arizona time) on Thursday is notable. The price of silver spiked up from around $15.12 to $15.64—3.4%—by around 8am. Twelve hours later, the price touched $15.73 before sliding off. We are always interested in the fundamentals, as we watch price moves. The question is always: is this speculators, betting with leverage on the silver price using futures? Or is it industrial or stacker demand for...

EM enjoyed an extended rally last week, and it should carry over to the early part of the week. The Wednesday FOMC meeting poses a risk to EM, especially if markets continue to price in a more hawkish Fed. The dot plots and press conference will be very important. BOE and the Norges Bank also meet this week, with the latter expected to deliver a 25 bp rate cut to 0.5%. Firm commodity prices are helping sentiment, with WTI making new highs for 2016 and approaching the $40 area. While weaker...

Each week we will publish the best articles by Marc Meyer, one of the most critical voices against the SNB.This post explains 3 points: That the SNB does not understand what assets and liabilities are – and due to this misunderstanding – it speculates with massive leverage. The difference between good and bad deflation, and that Switzerland has good deflation. That both the SNB and the Swiss government do what some Swiss exporters want. Therefore, the formerly admired central bank...

Fixed exchange rates limit the degrees of freedom for policymakers.  The breakdown of Bretton Woods in 1971 removed this constraint on official action, and the results were larger budget deficit and higher inflation.  The zero bound on interest rates also posed a constraint on behavior. Until this year, despite the long struggle against deflation, the Bank of Japan never instituted a negative policy rate.  Since the early days of the Great Financial Crisis, some had warned of limits of...

The Commitment of Traders reporting period ending March 8 showed little position adjusting ahead of the ECB meeting two days later.  A little more than 3/4 of the gross positions we track saw less than 5k contract change and only two were above 6k.   The gross long speculative sterling position was cut by a quarter or 9.6k contracts to 29.4k.  Speculators also built a larger gross long Australian dollar position, adding 9.7k contracts to 86.1k. The conventional focus on net positions does...

The reversal of the US dollar's gains half way through Draghi's press conference has undermined the near-term technical tone.  The risk is on the downside, at least in the first part of the week, ahead of the FOMC meeting.   The US Dollar Index posted an outside down session on March 10. It drove the five-day moving average through the 20-day average, and turned the RSI and MACDs. Follow through selling ahead of the weekend was limited, but a break of 96.00 suggests potential toward year...

The Canadian dollar's advance continues.  Neither the widening of interest rate differentials in the US favor nor a poor employment report has managed to buckle the Loonie. Oil and the general risk-on mood trump the other concerns.  In addition, investors are concluding that fiscal stimulus will reduce the possibility of additional monetary stimulus.  The implied yield on the June BA futures is now the highest since last June.  The Great Graphic, made on Bloomberg shows the greenback's...

The market reaction to Draghi's indication, once again, that interest rate policy has run its course, will be debated for some time.    Draghi delivered the goods that many investors said was lacking last December.  The ECB policy more than anyone expected.   All the boxes were checked.  Although the end date was not extended beyond March 2017, the four-year TLTROS will run into the new decade, and Draghi indicated that rates will remain low well beyond the end of the asset purchases....

The euro is paring the recovery that began in the middle of the ECB's press conference yesterday. The markets had reacted as one intuitively would expected to broad easing of interest rates and credit conditions.   The market reversed, and violently so, only after Draghi seemed to rule out further interest rate cuts.  Many investors took this to mean the ECB had gone all in and that monetary policy had reach the end.   We do not expect this interpretation to be sustained.   Even though...