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Headlines Week January 30, 2017 Recently inflation rose more quickly in the euro zone, but this was mostly caused by a temporary oil price effect. Therefore the ECB might be dovish for a longer period than the SNB. Consumer price inflation will decide who is more dovish. Ultimately inflation will depend on the two key parameters wages and rents. Rents will rise first in Switzerland, while the Euro zone has downwards...

Swiss Franc Speculators were net short CHF in January 2015, shortly before the end of the peg, with 26.4K contracts. Then again in December 2015, when they expected a Fed rate hike, with 25.5K contracts. The biggest short CHF, however, happened in June 2007, when speculators were net short 80K contracts. Shortly after, the U.S. subprime crisis started. The carry trade against CHF collapsed. The...

Summary: Fed, BOJ, and BOE meet next week, each may adjust economic assessments in more favorable direction. Key challenge for many investors is the new US Administration. US employment, EMU inflation, Q4 GDP, and China’s PMI are among the data highlights. Three major central banks meet in the week ahead, and there are several important reports due out that will give investors more insight into how the...

Stock Markets EM was truly mixed last week, pulled in both directions by both idiosyncratic risks and global developments.  MXN, BRL, and ZAR were the best performers on the week, while TRY, HUF, and RON were the worst.  MXN gained despite signs that Trump will maintain a bellicose stance towards Mexico, but we think the peso remains vulnerable to further selling.   Markets ignored reports that the PBOC has asked banks...

Switzerland’s Gold Exports To China Surge To 158 Tonnes In December Switzerland’s gold bullion exports to China saw a huge jump in December, climbing to 158 tons versus a much lower 30.6 tons in November –  a jump of 416%. According to Eddie van der Walt as reported on the Bloomberg terminal this morning, total Swiss gold exports surged to 287.6 tons in December (valued at CHF 10.8b) according to data on the website of...

© Shannon Fagan | Dreamstime.com 20 Minutes. The Swiss States Council commission on public health endorsed a plan that could lead to higher health insurance premiums for those over 25. Swiss health insurance providers are required to pay into a communal pot to spread risk between insurance companies. The latest plan would reduce the amounts paid into this communal pot for every insured individual between 19 and 25 by...

Summary: The US has a direct investment strategy for historical reasons. It competes against export-oriented strategies. The FDI strategy does make low-skilled domestic labor compete with low-skilled foreign worker, but skilled workers abroad complement the skilled domestic worker. The rise of the populist-nationalism over the past year or so is partly predicated on a realist view of international relations. ...

Summary Press reports suggest that China’s central bank has ordered banks to limit new loans in Q1. Fitch revised the outlook on Nigeria’s B+ rating from stable to negative. Russia announced details of the FX purchase plan. Brazil’s central bank confirmed it will simplify the reserve requirement system for banks. S&P cut the outlook on Chile’s AA- rating from stable to negative. Mexican announced another hike in...

  Pledges for Trump “You boys know what makes this bird go up?  Funding makes this bird go up.  That’s right.  No bucks, no Buck Rogers.” – Gordon Cooper and Gus Grissom, The Right Stuff (film) Things are looking up for the United States economy in 2017.  You can just feel it.  Something great is about to happen. Sam Sheppard in “The Right Stuff” – a 1983 docudrama about the Mercury 7 program and “the...

Swiss Franc EUR/CHF - Euro Swiss Franc , January 27(see more posts on EUR/CHF, ) - Click to enlarge GBP/CHF Sterling Swiss Franc Exchange Rate Update Sterling vs the Swiss Franc has been going in an upwards direction this week after the Brexit verdict released on Tuesday morning. Initially this caused the Pound to fall vs the Swiss Franc but since then Sterling has continued to go upwards. Later today UK Prime...