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What is New?
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So Much Dollar Bull
According to the Federal Reserve’s calculations, the US dollar in Q1 pulled off its best quarter in more than twenty years – though it really didn’t need the full quarter to do it. The last time the Fed’s trade-weighed dollar index managed to appreciate farther than the 7.1% it had in the first three months of 2020, the year was 1997 during its final quarter when almost the whole of Asia was just about to get clobbered.In second place (now...
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An unexpected blow to the ECB
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FX Daily, May 26: Fear is Still on Holiday
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Weekly SNB Sight Deposits and Speculative Positions: Re-openings in the U.S.
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Swiss Trade Balance April 2020: foreign trade collapses
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Airfare refunds remain a sticking point
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Poll: 70 percent of residents back ‘SwissCovid’ tracing app
SNB and CHF
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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.
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Swiss central bank could take negative rates lower
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FINMA-Aufsichtsmitteilung 06/2020: Verlängerung oder Auslaufen von Erleichterungen infolge der COVID-19-Krise
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Why is the Pound to Euro Rate Falling? Will it Continue?
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Announcement regarding recall of banknotes from eighth series
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SNB COVID-19 refinancing facility expanded to include cantonal loan guarantees as well as joint and several loan guarantees for startups
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Economic cost of pandemic will be enormous: SNB chief
Gold and Bitcoin
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An unexpected blow to the ECB
Since the beginning of the year, the corona crisis has come to monopolize the news coverage to the extent that a lot of very important stories and developments either went underreported or were ignored altogether. One such example was the very surprising ruling out of the German Constitutional Court in early May, that challenged the actions and remit of the ECB.
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When Is a Capital Gain Capital Consumption? Market Report, 25 May
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The Federal Counterfeiter
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Open Letter to Crispin Odey
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How crypto mining tried, but failed, to gain a Swiss toehold
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Clean gold: How Switzerland could set new supply chain standards
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“We are expecting a new wave and we’re prepared for it.”
Austrian Economics
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An unexpected blow to the ECB
Since the beginning of the year, the corona crisis has come to monopolize the news coverage to the extent that a lot of very important stories and developments either went underreported or were ignored altogether. One such example was the very surprising ruling out of the German Constitutional Court in early May, that challenged the actions and remit of the ECB.
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The Folly of “Ask What You Can Do for Your Country”
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Narrative Economics: How Stories Go Viral and Drive Major Economic Events
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The Japanese Love of Keynesian Economics Might Finally Be Coming to an End
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Why an Economy Can’t Work without Market Prices
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Banking and Monetary Policy from the Perspective of Austrian Economics
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Let’s Hope Deflation Is Headed Our Way
Swiss & European Macro
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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...
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Modern Monetary Theory makes inroads following coronavirus crisis
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House View, May 2020
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Swiss Producer and Import Price Index in April 2020: -4.0 percent YoY, -1.3 percent MoM
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7.9 billion hours worked in 2019
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Swiss Consumer Price Index in April 2020: -1.1 percent YoY, -0.4 percent MoM
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Swiss Retail Sales, March 2020: -6.2 percent Nominal and -5.6 percent Real
Swiss Markets & News
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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.
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Poll: 70 percent of residents back ‘SwissCovid’ tracing app
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Coronavirus: drop in revenue could leave Swiss hospitals with 3 billion loss
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Most want masks made compulsory on Swiss public transport, suggests survey
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Swiss maker of clean aviation fuel gets boost from Lufthansa
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Swiss finance minister concerned about Covid-19 debt crisis in Europe
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EasyJet customer data hacked
FX Trends
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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.
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FX Daily, May 22: US-China Escalation Sinks Hong Kong and Hits Risk Appetites
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FX Daily, May 21: Markets Pull Back after Flirting with Breakouts
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FX Daily, May 20: Fed Funds Futures No Longer Imply Negative Rates
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FX Daily, May 19: Optimism Burns Eternal
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FX Daily, May 18: Yuan Slumps as US-Chinese Tensions Rise
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FX Daily, May 15: Much Talk but Little Action
Global Macro & Emerging Markets
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So Much Dollar Bull
According to the Federal Reserve’s calculations, the US dollar in Q1 pulled off its best quarter in more than twenty years – though it really didn’t need the full quarter to do it. The last time the Fed’s trade-weighed dollar index managed to appreciate farther than the 7.1% it had in the first three months of 2020, the year was 1997 during its final quarter when almost the whole of Asia was just about to get clobbered.In second place (now...
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The Pandemic Gives Us Permission To Get What We Always Wanted
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Dollar Firm as China’s Hong Kong Gambit Triggers Risk-Off Trading
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No Flight To Recognize Shortage
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Dollar Firm as US-China Tensions Flare
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Dollar Treads Water Ahead of FOMC Minutes
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So Much Bond Bull
Markets
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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.
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The Secret to Fun and Easy Stock Market Riches
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A Pharmaceutical Stock That Is Often Particularly Strong At This Time Of The Year
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The Triumph of Madness
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Markets on Edge as New Week Begins
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The Golden Autumn Season – One of the Most Reliable Seasonal Patterns Begins
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America’s Road Map to $40 Trillion National Debt by 2028
CHF End of Peg
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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.
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Q1/2015: Swiss Real GDP Rises by 15 percent … in Euro Terms
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Is the Swiss Franc Really so Expensive or is Swiss Consumption anemic?
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End of EUR/CHF Peg
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Colin Lloyd on the end of the EUR CHF peg
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Why did the Swiss franc spike? Lack of Capital Outflows
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What Caused The Swiss Financial Tsunami? Three Reasons, One Trigger, One Chain Reaction
The History of the Swiss Franc
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Swiss Franc History, 2012: CHF becomes a “safe” Risk-On Currency
At the end of May, SNB president Jordan admitted that the EUR/CHF floor will not raised (here also cited by Bloomberg): “We cannot arbitrarily manipulate our currency. In an even worse crisis situation this would be disastrous and counterproductive. The floor must be legitimized. The current minimum exchange rate is realistic and has helped the Swiss economy.”
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Volckers Attack on Stagflation
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Swiss Franc History 1986-1996: Swiss real estate Boom and Bust
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Swiss Franc History, 2000-2007: The sale of the Swiss gold reserves
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The Secret History Of The Banking Crisis
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Swiss Franc History: The long-term view and the comparison with gold
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Swiss Franc History: Volcker Shock, Oil Glut and the Breakdown of Gold and Emerging Markets
Economic Theory
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Traditional Monetarist vs. Market Monetarists
Along the double mandate of the federal reserve, monetarists can be divided into. - traditional monetarists that focus on a slow increase of money supply in order to avoid price inflation. - Market monetarists that want to target growth and income instead of inflation.
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Social and Geographic Theories and the Euro Crisis
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7b) Major Schools of Economics
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Hans Werner Sinn’s Piketty Critique: “r ≠ i > g”
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Post Keynesians
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Irvin Fisher’s Deflationary Spiral
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Minsky and Kindleberger
Richard Koo and Sector Balances
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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.
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Richard Koo, Revitalizing the Eurozone without Fiscal Union, April 2012
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7d) Richard Koo’s and other Sector Balances
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How Long Will the U.S. Recovery Last? A Reminder: The False Japanese Recovery in 1998/1999
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Richard Koo: Balance Sheet Recessions
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Balance Sheet Recession becomes mainstream, four years too late
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Cultural Reasons for Japan’s Deflation: Can the U.S. Go into a Balance Sheet Recession?
