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Physics students study mechanical systems in which pulleys are massless and frictionless. Economics students study monetary systems in which rising prices are everywhere and always caused by rising quantity of currency. There is a similarity between this pair of assumptions. Both are facile. They oversimplify reality, and if one is not careful they can lead to spectacularly wrong conclusions. And there are two key differences. One, in physics, students know that...

Swiss Franc The Euro has risen by 0.18% to 1.0997 EUR/CHF and USD/CHF, November 25(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: The combination of the victory of the pro-democracy movement in Hong Kong and an apparent concession by China on intellectual property rights is helping bolster risk appetites to start the week. Equities are higher. Hong Kong’s Hang Seng led Asia Pacific equities with a 1.5% gain,...

USD/CHF pulls back from six week high. Falling trend line since early October, 200-day SMA keeps buyers hopeful. An upside beyond mid-October high could escalate pair’s run-up towards the previous month high. USD/CHF fails to hold the recent trend line breakout while declining to 0.9970 during early Monday. Even so, the quote stays beyond a multi-week-old falling support-line, at 0.9960, while also trading above 200-day Simple Moving Average (SMA) level of 0.9948. As...

Our scenario of ongoing global growth moderation and elevated political uncertainties should, we believe, support defensive currencies. We consider a currency ‘defensive’ if it is likely to remain resilient should global risk appetite falter. Among major currencies, the US dollar, the Japanese yen and the Swiss franc are usually considered as defensive. Indeed, the structural current account surplus and large net foreign assets of both Japan and Switzerland make...

(KEYSTONE/MARTIAL TREZZINI) Voters in Geneva have backed a local initiative calling for controlled development of the airport. According to initial results, 55.81% of voters said “yes” on Sunday to the constitutional initiative calling for the “democratic piloting of Geneva Airport”. Specifically, the initiativeexternal link is for tighter controls on the expansion of Geneva Airport, with noise and air pollution becoming a higher priority. Supporters of the...

Stripmining the planet to maximize profits isn’t progressive or renewable–it’s just exploitive and destructive. How do we describe the finding that the planet’s most widely-owned super-corporation is destroying the planet to maximize its smartphone sales and profits? Shall we start with “inconvenient?” Yes, we’re talking about Apple, famous for coercing customers to upgrade their Apple phones and other gadgets if not annually then every couple years, as the most...

There have been three general issues that the macro-fundamental picture has revolved around this year:  trade, growth, and Brexit.  On all three counts, conventional wisdom seems unduly optimistic, and this may have helped dampen volatility. A series of signals suggest that the US and China remain far apart in trade negotiations.  The US wants China to promise to increase agriculture imports from American farms to more than twice the 2017 peak.  Not only is China...

The dollar was surprisingly resilient last week; we look for further dollar gains ahead It is a holiday shortened week in the US, but there are still some major data releases There is a fair amount of eurozone data this week; UK Prime Minister Johnson unveiled his Tory manifesto Hong Kong held local elections this weekend; tensions between Japan and Korea appear to have eased, but questions remain The dollar was surprisingly resilient last week.  Despite the lack of...

The money supply growth rate rose in October, climbing to a twenty-eight-month high. The last time the growth rate was higher was during July of 2017, when the growth rate was 5.07 percent. During October 2019, year-over-year growth in the money supply was at 4.95 percent. That’s up from September’s rate of 3.10 percent, and was up from October 2018’s rate of 3.49 percent. The increase in money-supply growth in October represents a sizable reversal of the trend...

Operation Car Wash began in March 2014 as an investigation into allegations that executives at Brazil’s state oil company Petrobras had accepted bribes from construction firms in return for awarding them contracts at inflated prices. (Keystone / Antonio Lacerda) Swiss investigators have executed searches at the Geneva offices of commodity traders Vitol and Trafigura at the request of Brazilian federal prosecutors as part of Brazil’s Lava Jato [Car Wash] corruption...