FX Daily, April 03: Oil Firm, Greenback Extends Gains

Overview:  Global equities are finishing the week on a soggy tone despite the 2%+ gains seen in the US yesterday. The extension of shutdowns, rising contagion and fatality rate, and imploding economies weigh on prices. In Asia, Korea and Indonesia bucked the trend to most minor gains.  Europe is giving back yesterday's gains, and the Dow Jones Stoxx 600 is nearly flat on the week.

GBPCHF Strengthens on News That COVID-19 Spread Appears to Be Slowing

The pound continued to strengthen against the Swiss franc yesterday following the news that the UK’s current lockdown situation appears to be slowing the spread of COVID-19, causing a 0.85% movement in GBPCHF exchange rates throughout the day.

The Out Has Not Yet Begun to Fall, Market Report 31 March

So, the stock market has dropped. Every government in the world has responded to the coronavirus with drastic, if not unprecedented, violations of the rights of the people. Not to mention, extremely aggressive monetary policy. And, they are about to unleash massive fiscal stimulus as well (for example, the United States government is about to dole out over $2 trillion worth of loot).

The Crisis Has Exposed the Damage Done By Government Regulations

As we watch in real-time how governments respond to the novel coronavirus pandemic, some of the most predictable forms of state overreach—from restrictions on the freedom of assembly to the suppression of regular commerce—have been rolled out. Thankfully, there is no unified world government, so there exist various examples of how certain countries are dealing with the crisis that we can closely examine and learn from.

Swiss Consumer Price Index in March 2020: -0.5 percent YoY, +0.1 percent MoM

02.04.2020 - The consumer price index (CPI) increased by 0.1% in March 2020 compared with the previous month, reaching 101.7 points (December 2015 = 100). Inflation was –0.5% compared with the same month of the previous year. These are the results of the Federal Statistical Office (FSO).

Coronavirus: Swiss tourism expected to lose 6.4 billion francs

Tourism is one of the sectors hardest hit by the coronavirus and the response to it. Figures from a study by HES-SO Valais published by the newspaper Blick suggest the industry will see revenues in Switzerland drop 18%, or CHF 6.4 billion, in 2020.

FX Daily, April 03: Oil Firm, Greenback Extends Gains

Overview:  Global equities are finishing the week on a soggy tone despite the 2%+ gains seen in the US yesterday. The extension of shutdowns, rising contagion and fatality rate, and imploding economies weigh on prices. In Asia, Korea and Indonesia bucked the trend to most minor gains.  Europe is giving back yesterday's gains, and the Dow Jones Stoxx 600 is nearly flat on the week.

Banks Or (euro)Dollars? That Is The (only) Question

It used to be that at each quarter’s end the repo rate would rise often quite far. You may recall the end of 2018, following a wave of global liquidations and curve collapsing when the GC rate (UST) skyrocketed to 5.149%, nearly 300 bps above the RRP “floor.” Chalked up to nothing more than 2a7 or “too many” Treasuries, it was to be ignored as the Fed at that point was still forecasting inflation and rate hikes.

The Secret to Fun and Easy Stock Market Riches

Post Hoc Fallacy. On Tuesday, at the precise moment Federal Reserve Chairman Jay Powell commenced delivering his semiannual monetary policy report to the House Financial Services Committee, something unpleasant happened. The Dow Jones Industrial Average (DJIA) didn’t go up. Rather, it went down.

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, from 2004 to 2009: The undervalued franc

A Critical History of the Swiss Franc: During the "global carry trade" period between 2004 and 2007, the euro strongly appreciated against the Swiss franc. Most astonishingly this happened, despite the fact that the Swiss GDP growth was on average 0.5% higher

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.