FX Daily, May 26: Fear is Still on Holiday

Overview: The heightened tensions between the US and China sapped risk-appetites before the weekend, but appear to be missing in action today.  Equity markets have rebounded strongly. Nearly all the equity markets in the Asia Pacific region rose (India was a laggard) led by an almost 3% rally in Australia, which was seen as particularly vulnerable to the Sino-American fissure. 

Weekly SNB Sight Deposits and Speculative Positions: Re-openings in the U.S.

Update May 25, 2020: Reopenings in the U.S. Sight Deposits have risen by 6.4 bn CHF, this means that the SNB is intervening and buying Euros and Dollars: The change is +6.4 bn. compared to last week. Market sentiment have become positive during the last 2 or 3 weeks. But for many conservative investors the Swiss franc still serves as safe-haven.

When Is a Capital Gain Capital Consumption? Market Report, 25 May

The price of gold dropped a few bucks this week, but the price of silver jumped about half a buck. The drumbeat for the gold bull market is well underway, and it is beginning now for silver. So let’s do a quick update on the supply and demand fundamentals.

The Folly of “Ask What You Can Do for Your Country”

Recently, I was reminded of John F. Kennedy’s most famous line, “Ask not what your country can do for you; ask what you can do for your country,” when I heard it among several famous sound bites leading into a radio show segment. It also reminded me that we will hear it more soon, as we are approaching JFK’s May 29 birthday. However, it is worth reconsidering what it means.

Swiss Trade Balance April 2020: foreign trade collapses

Compared with the previous month, April 2020 exports contracted by 11.7% (actual: -10.0%); this is the largest seasonally adjusted decline ever recorded. They retracted by 2.2 billion to reach 16.7 billion francs. Imports even plunged by 21.9%, that is, by a drop of 3.5 billion francs, to 12.4 billion francs (actual: -17.8%); they thus fell almost to their July 2005 level. The trade balance closed with a record monthly surplus of 4.3 billion...

Airfare refunds remain a sticking point

The head of a major Swiss travel agency has complained that Swiss International Air Lines (SWISS) is not helping to reimburse clients fast enough. In the event of cancellations such as those prompted by the Covid-19 pandemic, Swiss package tour operators are legally obliged to provide refunds. But according to Thomas Stirnimann, the chief executive officer of Hotelplan, SWISS is not repaying the travel agents promptly.

FX Daily, May 26: Fear is Still on Holiday

Overview: The heightened tensions between the US and China sapped risk-appetites before the weekend, but appear to be missing in action today.  Equity markets have rebounded strongly. Nearly all the equity markets in the Asia Pacific region rose (India was a laggard) led by an almost 3% rally in Australia, which was seen as particularly vulnerable to the Sino-American fissure. 

The Pandemic Gives Us Permission To Get What We Always Wanted

Dear Corporate America: maybe you remember the old Johnny Paycheck tune? Let me refresh your memory: take this job and shove it. Put yourself in the shoes of a single parent waiting tables in a working-class cafe with lousy tips, a worker stuck with high rent and a soul-deadening commute--one of the tens of millions of America's working poor who have seen their wages stagnate and their income becoming increasingly precarious / uncertain while...

Gold Stocks – A Show of Strength

Gold Sector Outperforms Broad Market. The gold sector is in an uptrend since September 2018. The initially rather labored move accelerated after a secondary low was established in May 2019 and the 50-day and 200-day moving averages were breached for the second time. Last week the two moving averages were once again overcome in the course of the post-crash rebound.

Impressive Swiss Recovery After SNB Peg Removal

Retail data shows that the SNB peg removal in January 2015 as early as April 2015 with minimal adverse impact on the economy. Trade surplus showed that Switzerland had fully recovered its lost trade surplus in May and expectations crossed an important threshold into positive territory in June. CHF strengthened since May end, as the market caught wind of the Swiss recovery, and the Grexit would further strengthen the CHF if it were to occur.

Swiss Franc History, 2000-2007: The sale of the Swiss gold reserves

A critical Swiss Franc History: Between 2000 and 2007, the SNB made the Swiss cantons happy and delivered some billions of francs to prop up their finances. The gains were unfortunately not caused by strong asset management capabilities, but mostly due to gold price improvements and gold sales at quite cheap prices.

Rational Expectations, Lucas Critique and NAIRU

Weak Yen, Is it Really a Currency War?

Some journalists, like Ambrose Evans-Pritchard of the U.K.'s Telegraph and Michael Casey of the Wall Street Journal, have already claimed this to be a shot in the currency wars. Casey focuses exclusively on the BOJ activity and does not even mention GPIF.