On Monday, April 14, 2025, during the European afternoon, the U.S. dollar experienced a notable decline against the Swiss franc, reversing earlier gains. This shift was primarily influenced by escalating trade tensions between the United States and China.​ Specifically, the U.S. administration announced the immediate implementation of tariffs on a range of Chinese imports, including …

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The sight deposits at the SNB decreased by 7.5 billion francs compared to the previous week.

Reducing workload from 100% to 80% leads to a smaller proportional drop in after-tax income than in gross income. That’s a powerful financial lever for those considering part-time work:You’re “buying back time” at a discount, thanks to tax savings.

Swiss National Bank (SNB) Policy Update Policy Rate Cut: SNB lowered its policy rate from 0.50% to 0.25% due to low inflationary pressure and rising downside risks. 2025 Outlook: The policy rate is expected to remain at 0.25% for the rest of the year.

    2024 vs 2020 same time vs 2020 final     Time 05:32 UTC   2024  Nov6 05:36 UTC Nov 4, 2020 05:32 2024 near Final (Nov 18) Overall (image from Foxnews) Overall Harris: 59,248,216 votes Trump: 63,797,332 votes Biden: 60,995,579 votes (49.8%) Trump: 59,639,660 votes (48.6%) Biden: 79,308,019 votes (51%) Trump: 73,483,233 votes (47.3%) Georgia (screen) …

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  As the 2024 US presidential election approaches, investors worldwide are closely monitoring potential ramifications on global markets, including the euro. The outcome of this election could significantly influence currency fluctuations, trade policies, and international relations as Republican candidate Donald Trump seeks to regain the White House from the Democratic party – which has nominated …

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Die Finanzmärkte durchlaufen derzeit eine Phase beträchtlicher Veränderungen, die von verschiedenen globalen und lokalen Faktoren beeinflusst werden. Wirtschaftliche Unsicherheiten und geopolitische Spannungen haben die Märkte volatiler gemacht, was sowohl Risiken als auch Chancen für Investoren mit sich bringt. Insbesondere die Schweizer Wirtschaft, bekannt für ihre Stabilität und Robustheit, muss sich an diese neuen Herausforderungen anpassen, um weiterhin erfolgreich zu sein.

Die Luftfahrtindustrie ist ein integraler Bestandteil des globalen Transportsystems und verbindet Menschen und Güter über große Entfernungen hinweg. Im Jahr 2023 zeigte die Branche trotz beispielloser Herausforderungen aufgrund der COVID-19-Pandemie Widerstandsfähigkeit und Anpassungsfähigkeit. Während wir uns auf das Jahr 2024 vorbereiten, wollen wir uns die Zahlen aus dem Jahr 2023 genauer ansehen und die Prognose für den Luftfahrtsektor im kommenden Jahr erkunden.

Switzerland is gaining recognition for something beyond its stunning landscapes and precision timepieces – its rapidly expanding online gambling industry. The remarkable growth in gaming platforms’ popularity has been partly fueled by the adoption of igaming white label casino online solutions. These pre-built, fully licensed operational setups allow new ventures to launch their online casinos or sports betting sites swiftly.

Investieren unterscheidet sich grundlegend vom bloßen Spekulieren oder dem Hoffen auf schnelle Gewinne, wie man sie vielleicht in einem Casino erwarten könnte. Es geht vielmehr darum, durchdachte und informierte Entscheidungen zu treffen, die auf einer langfristigen Perspektive und einem Verständnis des Marktes basieren. Für Neulinge in der Welt der Finanzen kann dies eine Herausforderung darstellen, aber mit den richtigen Werkzeugen und Kenntnissen ist es ein durchaus erreichbares Ziel.

Überweisungen kennen viele von uns, oder? In Deutschland haben wir viele Möglichkeiten, unser Geld sicher von A nach B zu überweisen. Doch was steckt eigentlich hinter diesen Methoden? Schauen wir uns die gängigsten Wege an. Was macht sie so besonders und sicher?

  Investors constantly seek new avenues for diversification and higher returns in the ever-evolving finance landscape. One such frontier that has gained significant attention in recent years is private credit. This alternative asset class offers unique opportunities and challenges, attracting institutional investors, high-net-worth individuals, and fund managers. In this comprehensive guide, we’ll explore the intricacies …

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For many, tax refunds feel like a mini-windfall—a delightful surprise at the beginning of the year. A chance to cover old debts, splurge on something desired, or simply bolster savings. But what happens when this eagerly anticipated money doesn’t arrive on time?  Delays can, unfortunately, throw a wrench in your financial plans, causing unnecessary stress. …

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  In today’s hyper-connected world, the efficient management of a company’s fleet is an imperative that can’t be overlooked. Businesses that rely on fleet operations must prioritize their management not only for financial prudence but also to ensure the safety and efficiency of operations. Whether you’re overseeing a fleet of delivery trucks, rental cars, or …

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  Wahrscheinlich ist Ihnen schon aufgefallen, dass Ihre Gas- und Stromrechnungen teurer sind als früher. Falls Sie nach Möglichkeiten suchen, Ihre Stromkosten zu senken, gibt es viele einfache Maßnahmen, die Sie ergreifen können, um Ihre Energierechnungen zu senken – vom Ausschalten des Lichts bis hin zum kosteneffizienten Wäschewaschen. Hier finden Sie die 23 besten Möglichkeiten, …

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    Finding the right retirement portfolio balance is an individual journey, especially in today’s ever-evolving environment. No two individuals are alike when it comes to investing and planning for financial security in retirement, which can make it daunting to find a suitable option that provides protection yet also offers growth potential.  One less conventional …

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In today’s fast-paced world, technological advancements are changing the game in almost every industry. Restaurants, a sector once considered traditional and manual, are no exception. With the increasing demands of the 21st-century customer, the integration of technology has become inevitable. In this article, we will explore emerging technologies in restaurant management software, the benefits it …

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  When discussing different ways to run an economy, one idea that stands out is the “free market” system. Instead of being a mouthful, it’s essentially a way of doing things where the government doesn’t get too involved, and businesses are free to compete. This setup has some pretty cool perks that can make life …

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Texas is not the only US state to have deregulated electricity. The states of Delaware, Connecticut, Maine, Massachusetts, and New Hampshire have several deregulated electricity zones as well. However, there are significantly more deregulated electricity sectors in Texas than in any other state. As per official reports, more than 26 million residents of the state live …

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Celebrating individual and team successes and encouraging team bonding are among the best ways of improving workplace culture. Employees who feel appreciated regardless of the team they are in are more likely to be highly productive, ensure their team succeeds, and be more motivated and energetic in the workplace. Here are a few ways your …

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Fleet management is a critical aspect of any business that utilizes multiple vehicles for its operations. It’s an area of business operations that can often seem riddled with complexity and high costs, especially for businesses with a large fleet. However, successful businesses find ways to minimize these costs while maintaining optimal fleet operations. This article …

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Year in and year out, online gambling continues to increase in popularity in Australia. With the industry’s growth, there has been a surge in the number of payment methods available to players. With the many payment options available, AstroPay stands out as one of Australia’s most secure and reliable online gambling options. What is AstroPay? …

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As a small business owner, there are numerous benefits to taking advantage of the tax incentives associated with life insurance. It can provide you and your loved ones financial security and help you maximize profits for your business in the long run.   This article will explain the basics of life insurance for small business …

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  The auto market can be challenging and unpredictable, but with the right strategies and insights, automotive business owners can thrive. This article will explore the financial savvy ways to succeed in the auto market, focusing on understanding the current landscape, saving money, using modern financial tools and AI, and navigating warranties and service contracts. …

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Are you looking to invest in Singapore but feeling overwhelmed by all the different options? Finding the correct brokerage account can be challenging, especially if you are not an experienced investor. That’s why we’ve broken down some of the top-rated brokers in Singapore, explaining the pros and cons each offers so you can choose which online trading platform is best for your needs.

In November 2022, seasonally adjusted exports plunged by almost a tenth while imports increased by 1.4% month on month. At the exit in particular, the chemical-pharmaceutical sector weighed down the result. The trade balance closes with a small surplus of half a billion francs.

In October 2022 and after two consecutive monthly increases, seasonally adjusted exports fell by 1.1% (real: −1.8%). However, they remain on a positive trend. Imports fell by 1.4% over one month (actual: −0.8%), but have stagnated since the middle of the year. The trade balance ends with a surplus of 3 billion francs, the highest recorded in the last six months.

Also in the 3rd quarter of 2022, Swiss foreign trade experienced a positive development: while exports increased by 1.3%, imports grew by 0.8%. However, the latter have lost their vigor since the middle of the year. Both imports and exports nevertheless posted a record quarterly result. The trade balance closes with a surplus of 8 billion francs.

I was predicting for many years that the SNB will suffer a big loss when inflation comes. The time of reckoning has come. I expected some 150 billion loss in one year: at half time we are 95 billion CHF.

Swiss foreign trade strengthened further in both traffic directions in the 2nd quarter of 2022, reaching new highs. Exports increased by 0.9% and imports by 2.4% compared to the previous quarter. Prices have risen both at entry and exit. The trade balance closes with a surplus of 7.6 billion francs.

In May 2022, Swiss foreign trade strengthened in both directions of traffic: seasonally adjusted exports increased by 1.2% while imports jumped by 10.3%. The latter thus confirmed their upward trend despite strong fluctuations. Due to the different pace of growth at the outflow and the inflow, the trade balance surplus stood at CHF 2.0 billion.

The Swiss National Bank reports a loss of CHF 32.8 billion for the first quarter of 2022. The loss on foreign currency positions amounted to CHF 36.8 billion. A valuation gain of CHF 4.2 billion was recorded on gold holdings. The profit on Swiss franc positions was CHF 10.6 million.

Swiss foreign trade also grew in the 1st quarter of 2022, climbing to a record level. Imports strengthened further (+6.7%) while exports lost ground somewhat (+1.2%). Both at entry and exit, prices stood at very high levels. Due to different trends in the two directions of traffic, the trade balance surplus fell sharply (–2.8 billion francs).

In February 2022, seasonally adjusted exports jumped 15.4% – after their setback in the previous two months – while imports fell 2.9%. The output boom was driven by the strength of chemicals and pharmaceuticals. For the first time, the trade balance surplus passed the 5 billion franc mark.

After a year 2020 strongly affected by the Covid-19 pandemic, Swiss foreign trade proved to be very dynamic in 2021. Exports thus jumped by 15.2% – reaching a record level – while imports swelled by 10 .1%. The different pace of growth at entry and exit explained the jump in the trade surplus to the imposing level of 58.7 billion francs.

In October 2021, Swiss foreign trade lost its vigor. Exports declined 1.4% and imports 2.3% from the previous month. The chemicals and pharmaceuticals sector weighed on the results in both directions of traffic. The trade balance closed with a surplus of 4.4 billion francs, similar to that of previous months.

The Swiss National Bank reports a profit of CHF 41.4 billion for the first three quarters of 2021. The profit on foreign currency positions amounted to CHF 42.2 billion. A valuation loss of CHF 1.3 billion was recorded on gold holdings. The profit on Swiss franc positions amountedto CHF 0.8 billion.

In the second quarter of 2021, the current account surplus amounted to almost CHF 11 billion, CHF 7 billion higher than in the same quarter of 2020. The rise was mainly attributable to a higher receipts surplus in goods trade.

Secondary sector production rose by 14.2% in 2nd quarter 2021 in comparison with the same quarter a year earlier. Turnover rose by 15.5%. These sharp increases can largely be explained by the weak 2nd quarter of 2020, during which measures against the COVID-19 pandemic came into effect.

Swiss foreign trade showed dynamism in the second quarter of 2021. Exports rose 3.2% to a record level. They posted a fourth consecutive quarterly increase since the drop recorded at the start of the coronavirus pandemic. Imports continued the momentum of the previous quarter and increased 3.8%. The trade surplus stood at 11.5 billion francs.

After jumping 5.9% in March, exports stagnated in April, however, rising to a high level of 20 billion francs. Imports confirmed their vitality in previous months, up 3.5% to 16.8 billion francs (actual: + 2.2%). The trade balance closes with a surplus of 3.3 billion francs.

During the 1st quarter of 2021 and on a seasonally adjusted basis, exports increased by 4.8% (+ 2.7 billion francs; actual: + 4.9%), signing a third consecutive quarterly increase. At 58.1 billion francs, they not only exceeded their pre-crisis level, but also their second largest quarterly result. Imports increased by 1.7% or 805 million francs (actual: + 1.9%).

Bern, 04.03.2021 – The 2020 statistics of the Federal Customs Administration (AFD) are strongly influenced by the COVID-19 pandemic. In order to reduce the risk of transmission of the coronavirus, Switzerland has reintroduced systematic checks at national borders for the first time since joining Schengen, imposed entry restrictions and temporarily closed small border posts.

The Swiss National Bank reports a profit of CHF 20.9 billion for 2020 (2019: CHF 48.9 billion). The profit on foreign currency positions amounted to CHF 13.3 billion. A valuation gain of CHF 6.6 billion was recorded on gold holdings. The profit on Swiss franc positions was CHF 1.3 billion.

After declining in December 2020, Swiss foreign trade again showed a strong increase at the start of 2021. In January and in seasonally adjusted terms, exports rose 5.4% to 18.9 billion francs and imports by 3.3% to 15.3 billion. In both directions of trafficking, the boom relied heavily on chemicals and pharmaceuticals. The trade balance closed with a surplus of 3.6 billion francs.

Switzerland’s 2020 foreign trade will bear the brunt of the consequences of the COVID-19 pandemic: exports (-7.1% to 225.1 billion francs) and imports (-11.2% to 182.1 billion) posted a historic decline. Never before have they suffered such a significant quarterly decline as in the second quarter of 2020. Foreign trade has fallen back to its level recorded three years earlier. The trade balance closed the year with a record surplus of CHF 43.0 billion.

The Producer and Import Price Index rose in December 2020 by 0.5% compared with the previous month, reaching 98.4 points (December 2015 = 100). Compared with December 2019, the price level of the whole range of domestic and imported products fell by 2.3%.

In the third quarter of 2020, the current account surplus amounted to CHF 9 billion, CHF 3 billion less than in the same quarter of 2019. This decline was particularly due to the lower receipts surplus in trade in goods and services. In the case of the goods trade, the decline was attributable to gold trading. This decrease was curbed by the expenses surplus for primary and secondary income, which decreased compared to Q3 2019.

In November 2020, Swiss foreign trade stood out with an increase in both directions of traffic. In seasonally adjusted terms, exports advanced 4.8% and imports 4.2%. Falling over the previous two months, exports resumed their growth path and the trade balance closed with a surplus of 3.1 billion francs.

The Producer and Import Price Index fell by 0.1% in November 2020 compared with the previous month. The index stood at 97.9 points (December 2015 = 100). This decline was due in particular to lower prices for petroleum products and pharmaceutical preparations.

In October 2020, Swiss foreign trade took off. In seasonally adjusted terms, exports stagnated (-0.4%) while imports fell 3.3%. The slowdown recorded since this summer in both directions of traffic has thus been confirmed. The trade balance closed with a surplus of 2.9 billion francs.

Over the last 48 hours, Switzerland’s Federal Office of Public Health (FOPH) reported a further 227 deaths among laboratory-confirmed Covid-19 cases, bringing the death toll to 1,654 since summer and 3,385 since the beginning of the year.

Over the last 72 hours, Switzerland’s Federal Office of Public Health (FOPH) reported 198 deaths among laboratory-confirmed Covid-19 cases, bringing the death toll to 1,427 since summer and 3,158 since the beginning of the year.

Over the 7 days to 13 November 2020, Switzerland’s Federal Office of Public Health (FOPH) reported 553 deaths among laboratory-confirmed Covid-19 cases, bringing the death toll to 1,229 since summer and 2,960 since the beginning of the year.

© Sudok1 | Dreamstime.comThe 553 reported deaths this week represent 19% of the total so far, making the last 7 days the deadliest 7-day period since the virus arrived in Switzerland.

There are currently 3,945 Covid-19 patients in hospitals across Switzerland, according to FOPH figures published by RTS, a number significantly above the peak during the first wave.

Switzerland is currently using 77% of its current intensive care capacity (1,142 places), according to SRF. The number of Covid patients in intensive care has reached 512, a number

On 9 November 2020, Switzerland’s Federal Office of Public Health (FOPH) reported 17,309 new laboratory-confirmed Covid-19 cases over 72 hours, bringing the total to 229,222.

On 5 November 2020, Switzerland’s Federal Office of Public Health (FOPH) reported 62 deaths among laboratory-confirmed cases of Covid over 24 hours, bringing the total death toll since summer to 606.

The Swiss National Bank reports a profit of CHF 15.1 billion for the first three quarters of 2020. We explain why these profits are possible.

The second wave of the Coronavirus is currently raging in Europe. The attached image shows the number of newly infected people in European countries on a linear scale. In particular in the Czech republic, but also in Switzerland, France or Spain, one can see a tendency of exponential growth.

After its historic decline in the second quarter, Swiss foreign trade showed a clear recovery in the third quarter of 2020. In seasonally adjusted terms, exports swelled by 6.5% and imports by 11.5%. The two traffic departments, however, remained well below their record level for the second quarter of 2019. The trade balance closed with a surplus of 8.2 billion francs.

The Producer and Import Price Index rose in September 2020 by 0.1% compared with the previous month, reaching 98.0 points (December 2015 = 100). The rise is due in particular to higher prices for scrap as well as for basic metals and semi-finished metal products.

In the second quarter of 2020, the current account surplus amounted to CHF 10 billion; in the same quarter of 2019 it was CHF 21 billion. This decline was principally due to lower receipts from direct investment abroad. While the goods trade balance and the services trade balance changed only marginally, there was a significant decrease in receipts and expenses.

The Producer and Import Price Index fell in August 2020 by 0.4% compared with the previous month, reaching 97.9 points (December 2015 = 100). This decline was due in particular to lower prices for chemical and pharmaceutical products. Compared with August 2019, the price level of the whole range of domestic and imported products fell by 3.5%.

The Producer and Import Price Index rose in July 2020 by 0.1% compared with the previous month, reaching 98.3 points (December 2015 = 100). The rise is due in particular to higher prices for petroleum products. Compared with July 2019, the price level of the whole range of domestic and imported products fell by 3.3%.

Fed and ECB money printing and massive fiscal stimulus help the SNB to come back into positive territory for the year.
The renewed asset price inflation compensate for losses on the US dollar.

Swiss foreign trade recorded a record decline in the second quarter of 2020. In seasonally adjusted terms, exports plunged by 11.5% compared to the previous quarter and imports even by 16.0%. This result stems from the traffic collapse recorded in April in the wake of the coronavirus pandemic, with May and June having regained some color. The trade balance closed with a record surplus of 9.6 billion francs.

14.07.2020 – The Producer and Import Price Index rose in June 2020 by 0.5% compared with the previous month, reaching 98.1 points (December 2015 = 100). The rise is due in particular to higher prices for petroleum products as well as petroleum and natural gas. Compared with June 2019, the price level of the whole range of domestic and imported products fell by 3.5%.

Key figures: Current Account: Down 13.72% against Q1/2019 to 17.4 bn. CHF of which Goods Trade Balance: Plus 8.05% against Q1/2019 to 17.4 bn. of which the Services Balance: Minus 53.84% to 3.02 bn. of which Investment Income: Minus 0.54% to 6.3 bn. CHF.

After its historic setback of the previous month, foreign trade recovered a few colors in May 2020. Imports posted a seasonally adjusted increase of 9.8% to 13.6 billion francs; however, they are still below their March 2020 level. Although exports fell again (-1.2%), they eased compared to April. The trade balance closed with a surplus of 2.8 billion francs.

15.06.2020 – The Producer and Import Price Index fell in May 2020 by 0.5% compared with the previous month, reaching 97.6 points (December 2015 = 100). This decline is due in particular to lower prices for pharmaceutical and chemical products as well as for petroleum products. Compared with May 2019, the price level of the whole range of domestic and imported products fell by 4.5%.

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 francs.

14.05.2020 – The Producer and Import Price Index fell in April 2020 by 1.3% compared with the previous month, reaching 98.1 points (December 2015 = 100). The decline is due in particular to lower prices for petroleum products, petroleum and natural gas. Compared with April 2019, the price level of the whole range of domestic and imported products fell by 4.0%.

The Swiss National Bank reports a loss of CHF 38.2 billion for the first quarter of 2020. The loss on foreign currency positions amounted to CHF 41.2 billion.

The boom in chemicals and pharmaceuticals enabled Swiss exports to increase in March as well as in the first quarter of 2020 (+ 2.2% respectively + 1.0%). Despite the global economic situation linked to the “Covid-19”, the performance of this sector offset the decline suffered by most of the other groups. As in the previous quarter, seasonally adjusted imports fell (- 2.8%). The trade balance for the first three months of 2020 ends with a surplus of 8.3 billion francs.

16.04.2020 – The Producer and Import Price Index fell in March 2020 by 0.3% compared with the previous month, reaching 99.4 points (December 2015 = 100). This decline is due in particular to lower prices for petroleum products. Compared with March 2019, the price level of the whole range of domestic and imported products fell by 2.7%.

In the fourth quarter of 2019, the current account surplus was CHF 26 billion, CHF 11 billionmore than in Q4 2018. The increase was primarily attributable to the higher receipts surplus in investment income and goods trade. The transactions reported in the financial account showed a net acquisition of financial assets (CHF 40 billion) and a net incurrence of liabilities (CHF 19 billion) in Q4 2019.

Key for understanding the expansion of the Coronavirus, is the slope (or steepness / derivation) of the curve.
This post compares the slope values of different countries.

After their strong increase the previous month, exports plunged 5.0% in February 2020 and thus continue on their negative trend that started in September 2019. Imports weakened by 1.4%. The trade balance closed with a surplus of 2.0 billion francs.

The increasing volatility of SNB Earnings Annual results are not really definite. Given that the SNB accumulates foreign currencies with interventions, they have huge swings. But the SNB may lose 50 billion in one year and win 60 billion in the next year or vice verse. Good years of the Credit Cycle This trend was … Continue reading »

We suggest that the first month of a bigger virus outbreak is a good time for buying stocks. History has proven this timing decision right.

20.02.2020 – Secondary sector production rose by 1.3% in 4th quarter 2019 in comparison with the same quarter a year earlier. Turnover rose by 0.3%. This rise has continued without interruption since the 1st quarter 2017 but was slightly weaker in the reporting quarter. This is shown by provisional results from the Federal Statistical Office (FSO).

The Producer and Import Price Index remained unchanged in January 2020 compared with the previous month. The index stood at 100.7 points (December 2015 = 100). Petroleum products in particular saw higher prices, while pharmaceutical preparations became cheaper. Compared with January 2019, the price level of the whole range of domestic and imported products fell by 1.0%.

Despite a climate of uncertainty linked to trade tensions and the global economy, Swiss foreign trade grew in 2019, albeit at a slower pace. Exports increased by 3.9% to 242.3 billion francs while imports increased by 1.6% to 205.0 billion francs, the two directions of traffic thus reaching an historic peak. The trade balance closed with a record surplus of 37.3 billion francs.

17.01.2020 – The Producer and Import Price Index rose in December 2019 by 0.1% compared with the previous month, reaching 100.7 points (December 2015 = 100). Compared with December 2018, the price level of the whole range of domestic and imported products fell by 1.7%. The average annualised inflation rate in 2019 was –1.4%.

In summary: Nearly any change against the third quarter of 2018. About the same figures. But clearly and – as usual – a massive surplus. Key figures: Current Account: Up 39.15% against Q3/2018 to 18.09 bn. CHF. of which Goods Trade Balance: Plus 49.78% against Q3/2018 to 16.76 bn. of which the Services Balance: Minus 12.94% to 5.25 bn.

As in the previous month, cross-border flows of goods fell in both directions of traffic in November 2019. In seasonally adjusted terms, exports fell 1.7% on a month compared to 1.1% for imports. Swiss sales fell back to their level at the start of 2019, while admissions fell by almost a billion francs. The trade balance closed with a surplus of 2.2 billion francs.

12.12.2019 – The Producer and Import Price Index fell in November 2019 by 0.4% compared with the previous month, reaching 100.5 points (December 2015 = 100). This decline was due in particular to lower prices for chemical and pharmaceutical products. Compared with November 2018, the price level of the whole range of domestic and imported products fell by 2.5%.

In October 2019, Swiss foreign trade declined in both traffic directions. Exports fell sharply (-5.3%); however, they had jumped 8.8% the previous month, setting the bar very high. Imports fell 2.4%. Since the beginning of the year, foreign trade has thus revealed stagnation. The trade balance closes with a surplus of 2.4 billion francs.

The Producer and Import Price Index fell in October 2019 by 0.2% compared with the previous month, reaching 100.9 points (December 2015 = 100). Compared with October 2018, the price level of the whole range of domestic and imported products fell by 2.4%.

In the third quarter of 2019, foreign trade showed a positive trend: while exports rose by 0.9%, imports posted double growth (+ 1.8%). Both the first and the second have achieved a record quarterly result. The trade balance is closing with a surplus of 5.9 billion francs.

15.10.2019 – The Producer and Import Price Index fell in September 2019 by 0.3% compared with the previous month, reaching 101.1 points (December 2015 = 100). This decline is due in particular to lower prices for petroleum products and scrap. Compared with September 2018, the price level of the whole range of domestic and imported products fell by 2.0%.

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The assets side of the financial account registered a total net acquisition of CHF 11 billion (Q2 2018: net reduction of CHF 30 billion). Other investment contributed CHF 7 billion to this net acquisition (Q2 2018: net reduction of CHF 36 billion), in part because the SNB increased its foreign claims in connection with repo transactions.

In August 2019, Swiss exports fell for the second month in a row. Down 4.3% year-on-year, they dropped below 19 billion francs. On the other hand, imports rose by 3.4% and thus regained their level at the beginning of the year. The trade balance closed with a surplus of 1.2 billion francs.

12.09.2019 – The Producer and Import Price Index fell in August 2019 by 0.2% compared with the previous month, reaching 101.4 points (December 2015 = 100). The decline is due in particular to lower prices for rubber and plastic products as well as basic metals and semi-finished metal products. Compared with August 2018, the price level of the whole range of domestic and imported products fell by 1.9%.

After shining the previous month, foreign trade turned red in July 2019. Despite a decline of 3.9% to 19.6 billion francs, exports had their second largest monthly result ever reached. Down 1.7%, imports were close to CHF 17 billion. The chemistry-pharma has greatly impacted both directions of the traffic. The trade balance is closing with a surplus of 2.7 billion francs.

15.08.2019 – The Producer and Import Price Index fell by 0.1% in July 2019 compared with the previous month, reaching 101.6 points (December 2015 = 100). The decline is due in particular to lower prices for scrap as well as petroleum and natural gas. Compared with July 2018, the price level of the whole range of domestic and imported products fell by 1.7%.

The Swiss National Bank reports a profit of CHF 38.5 billion for the first half of 2019. The profit on foreign currency positions amounted to CHF 33.8 billion. A valuation gain of CHF 3.8 billion was recorded on gold holdings. The profit on Swiss franc positions was CHF 1.1 billion. The SNB’s financial result depends largely on developments in the gold, foreign exchange and capital markets.

In the second quarter of 2019, exports increased by 1.4% and imports by 0.2%. The two traffic departments have thus set a record quarterly result. The trade surplus, on the other hand, stood at 6.8 billion francs.

The Producer and Import Price Index fell in June 2019 by 0.5% compared with the previous month, reaching 101.7 points (December 2015 = 100). The decline is due in particular to lower prices for petroleum products, petroleum and natural gas as well as basic metals and semi-finished metal products. Compared with June 2018, the price level of the whole range of domestic and imported products fell by 1.4%.

In the first quarter of 2019, the current account surplus amounted to CHF 17 billion, on a par with the same quarter of 2018. Trade in services recorded a higher receipts surplus compared with the year-back quarter, whereas secondary income registered a higher expenses surplus. The balances of trade in goods and primary income barely changed.

13.06.2019 – The Producer and Import Price Index remained unchanged in May 2019 compared with the previous month. The index stood at 102.2 points (December 2015 = 100). Petroleum products in particular saw higher prices, while chemical and pharmaceutical products became cheaper. Compared with May 2018, the price level of the whole range of domestic and imported products fell by 0.8%.

The Producer and Import Price Index remained unchanged in April 2019 compared with the previous month. The index stood at 102.2 points (December 2015 = 100). Higher prices were seen in particular for petrol and machinery, while diesel and heating oil became cheaper.

The Swiss National Bank reports a profit of CHF 30.7 billion for the first quarter of 2019. The profit on foreign currency positions amounted to CHF 29.3 billion. A valuation gain of CHF 0.9 billion was recorded on gold holdings. The profit on Swiss franc positions was CHF 0.6 billion.

Swiss foreign trade saw a mixed evolution during the first half of 2019. In seasonally adjusted terms, exports fell slightly, still remaining above the 57 billion franc mark. Imports, on the other hand, continued to rise (+1 , 0%) to reach a record level of 51.2 billion francs. The trade balance closes with a surplus of 6.2 billion francs.

15.04.2019 – The Producer and Import Price Index increased in March 2019 by 0.3% compared with the previous month, reaching 102.2 points (December 2015 = 100). The rise is due in particular to higher prices for petroleum products. Compared with March 2018, the price level of the whole range of domestic and imported products fell by 0.2%.

The current account surplus for 2018 was CHF 71 billion, CHF 26 billion more than in the previous year, an increase by over 50%.

In February 2019, like the previous month, seasonally-adjusted exports increased (+ 2.3%), reaching a record level of 19.4 billion francs. On the other hand, imports fell by 1.2% in one month to 17.4 billion francs. The trade balance shows a surplus of 2.0 billion francs.

The Producer and Import Price Index increased in February 2019 by 0.2% compared with the previous month, reaching 101.9 points (December 2015 = 100). The rise is due in particular to higher prices for petroleum products. Compared with February 2018, the price level of the whole range of domestic and imported products fell by 0.7%. These are some of the findings from the Federal Statistical Office (FSO).

The SNB earned 2 billion on negative interest rates (Swiss franc positions below), but lost nearly 17 billion CHF on FX investments, of which 5 bn on bonds and 12 bn on stocks. Gold was nearly unchanged.

Swiss foreign trade started the year 2019 in a positive way. Seasonally adjusted exports rose by 1.1% to 18.9 billion francs and imports by 3.4% to 17.5 billion. The trade balance closed with a surplus of 1.4 billion francs.

14.02.2019 – The Producer and Import Price Index fell in January 2019 by 0.7% compared with the previous month, reaching 101.7 points (December 2015 = 100). This decline is due in particular to lower prices for petroleum products. Compared with January 2018, the price level of the whole range of domestic and imported products fell by 0.5%.

18.01.2019 – The Producer and Import Price Index fell in December 2018 by 0.6% compared with the previous month, reaching 102.5 points (December 2015 = 100). Compared with December 2017, the price level of the whole range of domestic and imported products rose by 0.6%. The average annualised inflation rate in 2018 was 2.4%.

15 Billion Francs Losses in 2018. Given that the good years have finished: Will the SNB will ever make profits again? And compensate for the ever rising Swiss franc?

  Current Account Key figures: Current Account: Up 85% against Q3/2017 to 14.6 bn. CHF of which Goods Trade Balance: Up 16.6% against Q3/2017 to 10.5 bn. of which the Services Balance: Minus 5.6% to 5.0 bn. of which Investment Income: Up 74.4% to 7.6 bn. CHF. Financial account Net acquisition of financial assets The … Continue reading »

In November 2018, exports confirmed their growth the previous month with a 1.8% increase, posting a new monthly peak. Imports, on the other hand, weakened by 1.2% and remain in a negative spiral. The trade balance closed with a surplus of 3.1 billion francs.

The Swiss National Bank (SNB) is maintaining its expansio nary mo netary policy, thereby stabilising price developments and supporting economic activity. Interest on sight deposits at the SNB remains at –0.75% and the target range for the three-month Libor is unchanged at between –1.25% and –0.25%.

The Producer and Import Price Index fell in November 2018 by 0.3% compared with the previous month, reaching 103.1 points (December 2015 = 100). This decline is due in particular to lower prices for pharmaceutical products. Compared with November 2017, the price level of the whole range of domestic and imported products rose by 1.4%.

In October 2018, seasonally adjusted exports grew 6.0%, after their slightly negative evolution since June. They thus reach a level monthly record. Conversely, the decline in imports continued (-1.8%). The balance commercial loop with a surplus of 2.6 billion francs.

The Producer and Import Price Index increased in October 2018 by 0.2% compared with the previous month, reaching 103.4 points (December 2015 = 100). The rise is due in particular to higher prices for petroleum products, petroleum and natural gas. Compared with October 2017, the price level of the whole range of domestic and imported products rose by 2.3%.

The Swiss National Bank (SNB) reports a loss of CHF 7.8 billion for the first three quarters of 2018. A valuation loss of CHF 3.7 billion was recorded on gold holdings. The loss on foreign currency positions amounted to CHF 5.3 billion. The profit on Swiss franc positions was CHF 1.5 billion.

After a year and a half of continued growth in Swiss foreign trade, exports in the third quarter of 2018 contracted by 2.9% compared with the previous quarter’s record. However, they remained above the 54 billion franc mark. Evolving at a high level, imports fell by 1.5% (-768 million francs). The trade balance closes with a surplus of 3.5 billion francs.

The Producer and Import Price Index fell in September 2018 by 0.2% compared with the previous month, reaching 103.2 points (December 2015 = 100). The decline is due in particular to lower prices for scrap. Compared with September 2017, the price level of the whole range of domestic and imported products rose by 2.6%. These are some of the findings from the Federal Statistical Office (FSO).

Key figures: Current Account: Up 27.0% against Q1/2018 to 22.1 bn. CHF, Goods Trade Balance: Up 4.8% against Q1/2018 to 15.2 bn., Services Balance: Minus 20.6% to 4.6 bn., Investment Income: Plus 107.7% to 10.7 bn. CHF.

After the dynamism registered until May 2018, Swiss foreign trade has been stalled since. In August and after seasonal adjustment, exports stagnated at a high level and imports fell by 1.1%. The trade balance has a surplus of 1.4 billion francs.

The Producer and Import Price Index remained unchanged in August 2018 compared with the previous month. The index stood at 103.4 points (December 2015 = 100). Prices were higher in particular for pharmaceutical and chemical products, while scrap became cheaper. Compared with August 2017, the price level of the whole range of domestic and imported products rose by 3.4%.

After stagnating the previous month, both exports and imports fell in July 2018. In seasonally adjusted terms, they fell by 3.0 and 2.8%, respectively. The decline in the chemicals-pharmaceuticals sector weighed on the result in both directions of the traffic. The trade balance is closing with a surplus of 1.2 billion francs.

The Producer and Import Price Index increased in July 2018 by 0.1% compared with the previous month, reaching 103.3 points (December 2015 = 100). The rise is due in particular to higher prices for watches, petroleum and natural gas. Compared with July 2017, the price level of the whole range of domestic and imported products rose by 3.6%.

The Swiss National Bank (SNB) reports a profit of CHF 5.1 billion for the first half of 2018. A valuation loss of CHF 0.9 billion was recorded on gold holdings. The profit on foreign currency positions amounted to CHF 5.2 billion. The profit on Swiss franc positions was CHF 1.0 billion.

The dynamism shown by exports since the beginning of 2017 continued in the second quarter of 2018. They are thus flying from record to record for the fifth quarter in a row. Imports, on the other hand, came to a standstill, at a high level, however, after posting strong growth in previous quarters. The trade balance closes on a surplus of 4.6 billion francs.

The Producer and Import Price Index increased in June 2018 by 0.2% compared with the previous month, reaching 103.2 points (December 2015 = 100). The rise is due in particular to higher prices for petroleum products and timber products. Compared with June 2017, the price level of the whole range of domestic and imported products rose by 3.5%.

The current account surplus amounted to CHF 18 billion in the first quarter of 2018, an increase of CHF 5 billion over the same quarter of 2017. This rise was attributable to the higher receipts surplus on trading in non-monetary gold, which is recorded under trade in goods. In the case of services as well as primary and secondary income, the balances remained stable.

After stagnating in previous months, exports rose in May 2018. Seasonally adjusted exports rose 0.9% in one month. Imports were more dynamic, at + 3.8%. Chemistry-pharma and the vehicle sector generated 90% of growth in both traffic directions. The trade balance closed with a surplus of 2.3 billion francs.

The Producer and Import Price Index increased in May 2018 by 0.2% compared with the previous month, reaching 103.0 points (December 2015 = 100). The rise is due in particular to higher prices for petroleum products. Compared with May 2017, the price level of the whole range of domestic and imported products rose by 3.2%. These are some of the findings from the Federal Statistical Office (FSO).

In recent months, both exports and Swiss imports have been apathetic. On April 1, 2018, and after seasonal adjustment, they respectively stagnated and fell by 3.4%. The chemistry-pharma has sealed the result in both directions of the traffic. The trade balance closed with a surplus of 2.8 billion francs.

The Producer and Import Price Index increased in April 2018 by 0.4% compared with the previous month, reaching 102.8 points (December 2015 = 100). The rise is due in particular to higher prices for petroleum products and machinery. Compared with April 2017, the price level of the whole range of domestic and imported products rose by 2.7%.

The Swiss National Bank (SNB) reports a loss of CHF 6.8 billion for the first quarter of 2018. A valuation loss of CHF 0.2 billion was recorded on gold holdings. The SNB’s financial result depends largely on developments in the gold, foreign exchange and capital markets. Strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards the annual result.

In the first quarter of 2018 and on a seasonally adjusted basis, foreign trade confirmed the positive trend of previous quarters. Both traffic directions have also reached record levels. Exports increased by 0.2% and imports by 4.1%. The divergent evolution of inflows and outflows has led to the smallest trade surplus in four and a half years.

The Producer and Import Price Index fell in March 2018 by 0.2% compared with the previous month, reaching 102.3 points (December 2015 = 100). This decline was due in particular to lower prices for petroleum products and pharmaceutical preparations. Compared with March 2017, the price level of the whole range of domestic and imported products rose by 2.0%. These are some of the findings from the Federal Statistical Office (FSO).

Key figures: Current Account: -9.6% against Q4/2016 to 19,679 bn. CHF, Record High Trade Surplus in Goods: +24.4% to 17,279 bn., Services Surplus : -4.0% to 4,820 bn., but Investment Income: down 42.7% to 5,877 bn.

In February 2018, exports increased by 1.8%, confirming their positive trend. After their January record, imports fell back (-9.8%). However, they continued to grow at a high level, at 16.1 billion francs. At the entrance, the flagship markets Europe and North America led the result.

The Producer and Import Price Index rose in February 2018 by 0.3% compared with the previous month, reaching 102.6 points (December 2015=100). The rise is due in particular to higher prices for chemical and pharmaceutical products. Compared with February 2017, the price level of the whole range of domestic and imported products rose by 2.3%. These are some of the findings from the Federal Statistical Office (FSO).

The Swiss National Bank (SNB) reports a profit of CHF 54.4 billion for the year 2017 (2016: CHF 24.5 billion). The profit on foreign currency positions amounted to CHF 49.7 billion. A valuation gain of CHF 3.1 billion was recorded on gold holdings. The profit on Swiss franc positions was CHF 2.0 billion.

Although exports fell in January 2018 from the December peak, their trend remains upward. Imports, for their part, began the year with fanfare to sign a record result. In both traffic directions, chemicals and pharmaceuticals made rain and shine.

Neuchâtel, 13 February 2018 (FSO) – The Producer and Import Price Index rose in January 2018 by 0.3% compared with the previous month, reaching 102.2 points (December 2015=100). The rise is due in particular to higher prices for petroleum products, electricity and gas as well as metals and metal products. Compared with January 2017, the price level of the whole range of domestic and imported products rose by 1.8%. These are some of the findings from the Federal Statistical Office (FSO).

Last year, Swiss foreign trade accelerated yet again relative to 2016: exports rose by 4.7% to reach a new record high. Imports grew by 6.9%, posting their strongest growth rate since 2010. Aside from the improved economic situation worldwide, the weakening of the Swiss franc and price trends played a decisive role in both directions of trade. With a surplus of CHF 34.8 billion, the balance of trade closed the year 6% (or CHF 2.1bn) lower than the previous year.

The Producer and Import Price Index rose in December 2017 by 0.2% compared with the previous month, reaching 101.9 points (December 2015=100). Compared with December 2016, the price level of the whole range of domestic and imported products rose by 1.8%. The average annualised inflation rate in 2017 was 0.9%. These are some of the findings from the Federal Statistical Office (FSO).

The Swiss current account surplus went down by 15% against the same quarter in 2016. In the third quarter of 2015. The current account surplus was still at 22 bn. CHF.
It seems to be a change in the usual movement that sees a higher Q3 surplus compared to the other quarters.

Swiss foreign trade proved dynamic in November 2017. After correction of working days, exports grew by 9.5% and imports even 16.4% year on year, both boosted by rising prices. In real terms, they increased by 4.4 and 6.8%, respectively. The balance commercial loop with a surplus of 2.7 billion francs.

The Producer and Import Price Index rose in November 2017 by 0.6% compared with the previous month, reaching 101.6 points (base December 2015 = 100). The rise is due in particular to higher prices for petroleum products, chemical and pharmaceutical products and scrap. Compared with November 2016, the price level of the whole range of domestic and imported products rose by 1.8%.

Turnover in the retail sector fell by 2.7% in nominal terms in October 2017 compared with the previous year. Seasonally adjusted, nominal turnover fell by 1.6% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO).

The health insurance premiums index (CIPI) recorded a growth of 3.8 percent over the previous year for the 2017 premium year. The KVPI thus achieved an index level of 185.3 points (base 1999 = 100). The impact of premium development on the growth of disposable income can be estimated using the CIPI. According to the KVPI model calculation by the Federal Statistical Office (FSO), the increase in premiums reduces the growth in average disposable income in 2017 by 0.3 percentage points.

In October 2017, Swiss foreign trade continued its advance. Adjusted for working days, exports grew by 5% against 7% for imports. Growth, however, weakened slightly compared to previous months. The trade balance is closing with a surplus of 2.4 billion francs.

The Producer and Import Price Index rose in October 2017 by 0.5% compared with the previous month, reaching 101.0 points (base December 2015 = 100). The rise is due in particular to higher prices for machinery, electrical equipment and metal products. Compared with October 2016, the price level of the whole range of domestic and imported products rose by 1.2%.

Turnover in the retail sector remained stable in nominal terms in September 2017 compared with the previous year. Seasonally adjusted, nominal turnover rose by 0.8% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO).

The Swiss National Bank (SNB) reports a profit of CHF 33.7 billion for the first three quarters of 2017. But in 2017, the picture is changed. Assuming a “biblical” cycle of seven good years and seven bad years, the SNB could now increase profits every year – thanks to a weaker franc and the seven good years.

With adjusted working days, exports grew by 2.5% and imports by 7.4% in the third quarter of 2017. Trade was thus consolidated at a high level. The balance of the trade balance contracted from 10.3 to 8.5 billion francs.

Turnover in the retail sector fell by 0.6% in nominal terms in August 2017 compared with the previous year. Seasonally adjusted, nominal turnover fell by 0.3% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO).

Key figures, Current Account: -3.6% against Q2/2016 to 18,748 bn. CHF, Trade Balance: +6.5% to 15,550 bn, Services Balance: -12.8% to 4,087 bn, Investment Income: -22.9% to 7,369 bn.

In August 2017, Swiss foreign trade grew stronger both at entry and exit. With growth of 9.9%, imports were much more dynamic than exports (+ 3.9%). The balance of trade closed with a surplus of 2.2 billion francs.

The SNB projects that she will reach her inflation target, shortly under 2% in the medium term, i.e. in 2019/2020. One reason might be the weakening of the Swiss Franc. But she does not prepare for a normalization of her policy: From the history we know that – once the franc is weakening – inflation may rise very quickly.

The euro rose close to CHF 1.15 with the ECB meeting this week. Finally traders realized that the ECB committed not to hike rates for a very long time. The ECB will review and take a first decision on the bond purchasing program this autumn. However, this program will come to an end only when the inflation target of 2% becomes in reach.

The net speculative CHF position has fallen from 2K short to 1.8K contracts short (against USD). Speculators did not make any significant adjustment to gross positions, which we define as 10k or more contracts in the currency futures, during the CFTC reporting week ending August 29.

For us, the sudden euro rise from 1.08 to 1.14 is an illusion, the euro will fall sooner or later again. Macron will not help the French economy and low core inflation will prevent that the ECB ends her bond buying program.

Turnover in the retail sector fell by 0.8% in nominal terms in July 2017 compared with the previous year. Seasonally adjusted, nominal turnover fell by 1.1% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO).

The net speculative CHF position has risen from 1.2K short to 2K contracts short (against USD). Speculators continued to amass a significant short sterling position in the futures market. In the CFTC reporting week ending August 22, speculators added 11.7k contracts to the gross short position, lifting it to 107.4k contracts.

The broad technical condition of the dollar deteriorated materially before the weekend. The dollar had some gains versus the franc during the last month, but it lost all during the last days.The EURCHF continues with a 2.5% win for the last month.

In July 2017, after adjusting for working days, exports grew by 4.5%, which were less dynamic than the previous two months. Imports rose red (-0.5%). The trade balance loops with a surplus of 3.6 billion francs.

The net speculative CHF position has fallen from -1.4K short to -1.2K contracts short (against USD). Speculators made several significant position adjustment in the CFTC reporting week ending August 15, that included an escalation of aggressive rhetoric by the US and North Korea.

The euro has lost some momentum, Draghi does not want to talk about an early end of his bond buying programming. Confirmed by economic data, 1.2% core inflation compared to a long-term inflation target of 2%. Consequently the Swiss appreciated during the week.

The Producer and Import Price Index remained unchanged in July 2017 compared with the previous month at 99.7 points (base December 2015 = 100). Petroleum products in particular became cheaper. Prices were higher for scrap, computers and metal products. Compared with July 2016, the price level of the whole range of domestic and imported products fell by 0.1%.

Despite the tensions between Donald Trump and North Korea’s Kim Jong-un, the EUR/CHF only depreciated to 1.13. In the last week, the SNB did not have to intervene. This proves that investors have not taken the tensions seriously.

The net speculative CHF position has risen from -1.5K short to 1.4K contracts long (against USD). In the CFTC reporting week ending August 1, speculators in the futures market continued to build long exposure in the dollar-bloc currencies. In the three sessions after the reporting period closed, the dollar-bloc currencies have traded heavily.

The Swiss Franc entered the second week of stronger losses. While the euro gained 4% last week, the dollar appreciated against the Swiss Franc 2% during this week.

Turnover in the retail sector rose by 1.1% in nominal terms in June 2017 compared with the previous year. Seasonally adjusted, nominal turnover rose by 0.5% compared with the previous month. Real turnover in the retail sector also adjusted for sales days and holidays rose by 1.5% in June 2017 compared with the previous year.

The Swiss National Bank (SNB) reports a profit of CHF 1.2 billion for the first half of 2017. A valuation gain of CHF 0.3 billion was recorded on gold holdings. The profit on foreign currency positions amounted to CHF 0.1 billion and the profit on Swiss franc positions stood at CHF 0.9 billion. The SNB’s financial result depends largely on developments in the gold, foreign exchange and capital markets.

The net speculative CHF position has risen from -3.7K short to -1.5K contracts short (against USD). Speculators were active in the currency futures in the CFTC reporting week ending July 25. In particular, speculative sentiment continues to be drawn to the Canadian and Australian dollars.

The Swiss franc was the only major foreign currency that fell against the dollar last week.  The 2.6% decline was the largest in two years.

The net speculative CHF position has changed from -0.2K long to 3.7K contracts short (against USD). Since the beginning of May the Canadian dollar has been the strongest of the major currencies. However, until the most recent CFTC reporting week ending July 18, speculators in the futures market were net short.

Both Swiss Franc and Euro were moving upwards against the dollar. So CHF gained 3% versus the dollar in the last month. CHF losses against the euro are smaller, around 1.3%.

In the first half of 2017, both exports (+ 4.4%) and imports (+ 4.8%) were dynamic. While the former scored a record result, the latter scored a higher in eight years. In both directions of traffic, chemicals and pharmaceuticals contributed decisively to growth. The trade balance loops with a surplus of 19 billion francs.

Hawkish comments by Mario Draghi boosted the EUR against both USD and CHF. It also reduced the need for SNB interventions. The question is how long Draghi will remain hawkish, especially next winter, when headline inflation in the euro zone may fall under 1%.

The net long CHF position has risen from 0.1K short to 0.2K contracts short (against USD). Speculators are long EUR against both USD and CHF. We wonder how long this will be the case, given that we expect Euro zone inflation to fall under 1% from December 2017 onward.

The Euro remained the strongest among EUR, CHF and USD during the last month. 
The Swiss lost against EUR 1.5%, while it gained versus the dollar 0.75%.

The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation.

The net short CHF position has fallen from 4.7k short to 0.1k contracts short (against USD). Speculators in the futures market made several significant position adjustments in the CFTC reporting week ending July 4, despite it being a holiday-shortened week.

The ECB appears to be preparing investors for a further adjustment of its risk assessment and a reduction of its asset purchases as they are extended into next year.
This assessment has marked a new phase of an appreciating EUR/CHF rate. It followed the previous phase, the one with and after the French elections.  

Turnover in the retail sector fell by 0.3% in nominal terms in May 2017 compared with the previous year. Seasonally adjusted, nominal turnover rose by 0.3% compared with the previous month. Real turnover in the retail sector also adjusted for sales days and holidays fell by 0.3% in May 2017 compared with the previous year. Real growth takes inflation into consideration. Compared with the previous month, real, seasonally adjusted retail trade turnover registered an increase of 0.3%.

The net short CHF position has risen from 3k short to 4.7k contracts short (against USD). Speculators bought back previously sold Canadian dollar and Mexican peso futures positions in dramatic fashion in the CFTC reporting week ending June 27.

A virus has spread across the markets as the first half drew to a close. Many investors have become giddy. The low vol environment was punctuated by ideas that peak in monetary accommodation is past and that the gradual process of normalization is beginning.

Key Figures, Current Account: +39% against Q1/2016, now +11.1 bn. CHF, Trade Balance: +78% to 10.5 bn, Services Balance: +21% to 5.5 bn, Investment Income: -50% to +2.9 bn.

The net short CHF position has fallen from 14.5 short to 3K contracts short (against USD). The expiration of the June contracts and the roll into September positions appears to have boosted activity in the currency futures, and may obscure the signaling effect. Of the 16 gross positions we track, speculators add to exposure in all but four positions. There speculators covered gross short Swiss franc, Canadian, Australian, and New Zealand dollar positions.

Over the last month, the Swiss franc outpaced both EUR and USD. But the change is only little, the EUR fell by 0.60% and the dollar by 0.40%. The main reason for the stronger CHF is the fading enthusiasm after Macron’s victory in the French elections and hence a weaker euro. Consequently SNB interventions are rising again.

In May 2017, Swiss foreign trade was dynamic. Adjusted for working days, exports increased by 7.5% and imports by 8.7%. Chemicals and pharma boosted growth in both directions. The balance of trade closed with an impressive surplus of 3.4 billion francs.

The pro-European politician Macron has won the French elections. His success moved the EUR/CHF up to 1.0980, mostly caused by FX speculators. But “serious” investors (not FX speculators) did not follow the political event, but focus on monetary policy. A ECB rate hike is very, very far, see why….

The net short CHF position has fallen from 16.5 short to 14.5K contracts short (against USD). We wonder how long this will be the case, given that we expect Euro zone inflation to fall under 1% from December 2017 onward.

Swiss Franc vs USD and EUR Rarely in the foreign exchange market is there a V-shaped extreme. Most of the time, the high or low is a process that is carved over time. Although the explanation of the dollar’s weakness here in H1 vary, we continue to believe that the longer-term cyclical rally, the third since … Continue reading »

The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation.

The net short CHF position has fallen from 18.5 short to 16.5K contracts short (against USD). But the major movement was that speculators are net long the euro now and not the dollar any more. This implies that they are also long Euro against CHF. In the CFTC reporting week that covered the US employment data and the run-up to Super Thursday that featured an ECB meeting, former FBI Director Comey’s testimony before the Senate Intelligence Committee, the UK election, speculators mostly reduced exposure in the foreign exchange futures market.

The US Dollar has lost 4% against the franc since the beginning of May, while the euro is down only 1%. Most important events in this week were the ECB meeting and the UK elections. The inability of the Tory Party to secure a parliamentary majority spurred a sharp decline in sterling.

The net short CHF position has fallen from 19.8 short to 18.5K contracts short (against USD). But the major movement was that speculators are net long the euro now and not the dollar any more. This implies that they are also long Euro against CHF. Speculators in the future market made mostly minor adjustment in the gross positioning in the currencies.

While the Euro traded in the range between 1.08 and 1.09, the dollar declined by nearly 3%. The technical indicators warn that the US dollar is stretched, but the combination of disappointing auto sales and jobs report may deny it the interest rate support needed to facilitate a resumption of the bull market.

Switzerland’s real gross domestic product (GDP) grew by 0.3 % in the first quarter of 2017*. Private consumption growth expanded only slightly, while government consumption rose moderately. Following the previous quarter’s fall, investment in construction and equipment increased.

Real turnover in the retail sector also adjusted for sales days and holidays fell by 1.2% in April 2017 compared with the previous year. Real growth takes inflation into consideration. Compared with the previous month, real, seasonally adjusted retail trade turnover registered a decline of 2.4%.

The net short CHF position has fallen from 21.1 short to 19.8K contracts short (against USD). But the major movement was that speculators are net long the euro now and not the dollar any more. This implies that they are also long Euro against CHF. In the CFTC reporting week ending May 23 speculators in the futures market continued to largely position themselves for further dollar weakness.

The Swiss Franc recovered a lot of the losses that came with the French elections. That political event was mostly driven by speculators that will close their positions. We expected the EUR to trade around 1.07 to 1.0750 CHF in some time.

In April 2017, adjusted exports of working days shrank as imports strengthened by 2.3%. Changes in sales were marked by the reluctance of the chemical and pharmaceutical sector. The trade balance has closed with the smallest surplus in the last two years.

The net short CHF position has risen from 15.2 short to 21.1K contracts short (against USD). But the major movement was that speculators are net long the euro now and not the dollar any more. This implies that they are also long Euro against CHF. In the Commitment of Traders reporting week ending May 16, speculators in the futures market made three significant adjustments in the currency futures.

The Swiss Franc recovered a lot of the losses that came with the French elections. That political event was mostly driven by speculators that will close their positions. We expected the EUR to trade around 1.07 to 1.0750 CHF in some time.

The pro-European politician Macron has won the French elections. His success moved the EUR/CHF up to 1.0980, mostly caused by FX speculators. But “serious” investors (not FX speculators) did not follow the political event, but focus on monetary policy. A ECB rate hike is very, very far, see why….

The Producer and Import Price Index fell in April 2017 by 0.2% compared with the previous month, reaching 100.1 points (base December 2015 = 100). This decline is due in particular to lower prices for petroleum products and machinery. Compared with April 2016, the price level of the whole range of domestic and imported products rose by 0.8%.

The net short CHF position has fallen from 17.7 short to 15,2K contracts short (against USD).
But the major movement was that speculators are net long the euro now and not the dollar any more. This implies that they are also long Euro against CHF.

The euro rose up to 1.0980. How long this momentum will last is still the question, given that it is driven by this political event and sustained by SNB interventions.

The centre-left politician Macron has won the French elections. His success moved the EUR/CHF up to 1.0960, mostly caused by FX speculators. But serious investors – i.e. not FX speculators – did not follow the political event. The SNB had to intervene for 1.6 bn francs.

The net short CHF position has risen to 17K contracts (against USD). It was feast or famine in the adjustment of speculative positions in the currency futures market during the CFTC reporting period ending May 2. Speculators either made large adjustments or very small adjustments, and little in between.

The Swiss Franc index gained 1.5% in the last month, the biggest part of it is from the last week. The trade-weighted indices the Fed tracks are updated monthly. The Bank of England calculates the effective exchange rate on a daily basis. It has not fallen since April 24.

The centre-left politician Macron has won the French elections. He is a politician that – similar to Hollande four years ago – promises economic improvements, move investment, more jobs. Mostly probably he will fail similar to Hollande. His success moved the EUR/CHF up to 1.0865, mostly caused by FX speculators, but the SNB had to intervene.

The net short CHF position has risen to 17K contracts (against USD). The striking development among speculators in the futures market is the reversal of the record gross (and net) short Treasury note position two months ago.

Turnover in the retail sector rose by 1.8% in nominal terms in March 2017 compared with the previous year. This is the sharpest increase since June 2014. Seasonally adjusted, nominal turnover rose by 0.6% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO).

Often the US dollar, as the numeraire, seems to be the main actor in the foreign exchange market. Other times, the dollar appears to be at the fulcrum between European currencies on one hand, and the dollar-bloc currencies on the other hand. Another way expressing this is whether there is a dollar-move underway or is it really more about the crosses.

The SNB reports a profit of 7.9 bn CHF, of which 2.2 bn come from the gold holdings. Given that the bank has introduced a “minimum euro rate” around 1.06-1.07, this is not very difficult. It comes at the price of continuing interventions.

Swiss exports are moving more and more toward higher value sectors: away from watches, jewelry and manufacturing towards chemicals and pharmaceuticals. With currency interventions, the SNB is trying to keep sectors alive, that would not survive without interventions.

The net short CHF position stands at 13K contracts (against USD). In the CFTC reporting period ending April 21, speculators to significant positions in the euro, sterling and the Mexican peso. Bulls and bears were took more exposure in the euro and sterling, while in the peso the former added on while later sought cover.

While the dollar index had another bad week with a 0.75% less, the Swiss Franc currency index could accumulate the corresponding gains. Main reason is that the EUR/CHF rose over 1.07.

The net short CHF position has fallen to 10K contracts (against USD). In the days before US President Trump expressed concern about the dollar’s exchange value, speculators in the futures market mostly added to the gross long foreign currency positions.

Last week the Swiss Franc improved against both euro and dollar, but – compared to its safe-haven counterpart Japanese Yen – it had a bad performance. We expect strong SNB interventions.

The Producer and Import Price Index rose in March 2017 by 0.1% compared with the previous month, reaching 100.3 points (base December 2015 = 100). The slight rise is due in particular to higher prices for scrap. Compared with March 2016, the price level of the whole range of domestic and imported products rose by 1.3%. These are some of the findings from the Federal Statistical Office.

SNB sight deposits changed by 2.4 bn last week, hence the SNB intervened for this amount. This value is a movement back to the weekly intervention trend. We expect a further downtrend of EUR/CHF in the next 2 years.

Speculators continued to reduce their net short euro exposure until March 28. Apparently they do not understand the difference between core inflation and the headline figure. In the last week, finally they increased their Euro shorts again…. and reduced their CHF shorts.

The US dollar appreciated against most of the major currencies last week. The Japanese yen was the chief exception. It rose about 0.5% as US yields remained heavy and equities were mostly softer. The Dollar Index did not fall in any session last week. It has had one losing session over the past nine, and that was the last day in March when the Dollar Index slipped less than 0.1%. It finished the week a bit above thee 61.8% retracement objective of the decline from last month’s peak (March 9) near 102.25, found just below 101.00 A trend line from the January and March highs is found near 101.40 by the end of next week. It corresponds to the 50% retracement of the Dollar Index decline from the January high, and near the upper Bollinger Band (~101.55 now).

Turnover in the retail sector rose by 0.5% in nominal terms in February 2017 compared with the previous year. However, excluding turnover from service stations, retail turnover fell by 0.3%. Seasonally adjusted, nominal turnover rose by 0.9% compared with the previous month. These are provisional findings from the Federal Statistical Office.

The SNB intervenes for 1.6 bn CHF at EUR/CHF 1.07 – 1.0750. This is less than previously.

Speculators continued to reduce their net short euro exposure until March 28. Apparently they do not understand the difference between core inflation and the headline figure.

Weak inflation figures in the euro zone let the common currency fall against both the dollar and the Swiss franc. Still last week, the Swiss Franc index had some losses against the US dollar index.

The SNB intervenes for 2.9 bn CHF at EUR/CHF 1.07. For us, clearly too much and too risky; she will not maintain this pace over a longer term. Hence the EUR/CHF is prone to fall again.

Another time speculators reduced their net Euro shorts after the less dovish ECB. But the net short of CHF nearly remains stable. This resulted in an appreciation of EUR/CHF.

In the last week, the Swiss Franc index recovered and gained about 2%. The dollar index lost 1.5%. Position adjustments: The dollar tended to trade heaviest against those currencies that speculators were short, like the euro, yen, and sterling.

Switzerland extended its current account and trade surplus in Q4/2016 by 22%, helped by strong interventions by the Swiss National Bank.

The Swiss National Bank carried out foreign exchange interventions totaling 67.1B Swiss francs in 2016 in order to counter “an undesired tightening of monetary conditions,” the central bank disclosed in its annual report. That was down from 86.1B francs in 2015, when the SNB intervened heavily at the start of the year following its decision to remove a cap on the franc’s value against the euro.

Swiss exports are moving more and more toward higher value sectors: away from watches, jewelry and manufacturing towards chemicals and pharmaceuticals. With currency interventions, the SNB is trying to keep sectors alive, that would not survive without interventions.

The EUR/CHF suddenly appreciated with the ECB meeting, when Draghi seemed less dovish than before. The rate rose from the previous 1.0650 to over 1.0750. With the SNB meeting, the EUR/CHF receded again. SNB interventions, are currently at 2 bn. per week compared to 5 bn. before Draghi.

Speculators reduced their net Euro shorts after the less dovish ECB. But the net short of CHF nearly remains stable. This resulted in an appreciation of EUR/CHF.

The failure of the Fed to signal an increased pace of normalization and the prospects of other central banks raising rates spurred dollar losses, which deteriorated its technical outlook.

The EUR/CHF collapsed after the monetary assessment meeting of the Swiss National Bank. The SNB did not fulfill the wishes of currency traders with a more dovish policy, i.e. with lower rates or the thread of stronger interventions.

The Producer and Import Price Index fell in February 2017 by 0.2% compared with the previous month, reaching 100.2 points (base December 2015 = 100). This decline is due in particular to lower prices for scrap, petroleum products and pharmaceutical products. Compared with February 2016, the price level of the whole range of domestic and imported products rose by 1.3%. These are the findings from the Federal Statistical Office (FSO).

The SNB intervened less than before. Investors might have changed their positions after a less dovish ECB.

The commitments of traders were released on March 7 before the ECB meeting of March 9. We expect a considerable re-adjustment.

The Swiss Franc lost this week in particular against the euro, given that Mario Draghi was less dovish than expected. If the stronger euro is driven only by speculators, or also by “real money” (investments in cash, bonds, stocks) will be visible in Monday’s sight deposits release.

The Swiss National Bank will have difficulties to weaken the Swiss Franc, because she is obliged to maintain her mandate, the avoidance of inflation. Already in January 2015, she gave up, because continuing interventions – at the excessively high euro rate of 1.20 – could have endangered her inflation mandate.

The Swiss National Bank (SNB) reports a profit of CHF 24.5 billion for the year 2016 (2015: loss of CHF 23.3 billion). The profit on foreign currency positions amounted to CHF 19.4 billion. A valuation gain of CHF 3.9 billion was recorded on gold holdings. The profit on Swiss franc positions was CHF 1.6 billion.

Once again a massive SNB intervention and a post Trump election record: 5,1 billion, at far too expensive FX rates: EUR rate of 1.0648 and USD/CHF over parity.

Speculators reduced their EUR net short positions, on a potential reduction of ECB quantitative easing. At the same time, they increased the CHF net shorts.

The pendulum of market sentiment swung hard and fast toward a Fed rate hike in the middle of March. The signals from Fed officials, including Governor Brainard and Powell, spurred the move. According to Bloomberg, the market had discounted a 90% chance of a hike before Yellen and Fischer spoke. A week ago, Bloomberg calculations showed a 40% chance of a move.

The Swiss economy relies very much (and probably too much) on exports. In the fourth quarter export of goods fell by 3.8%, while imports remained the same. Investments dipped, too. On the other side, consumption rose by a strong 0.9%. In total, the economy grew by only 0.1% QoQ (+0.6% YoY).

Turnover in the retail sector fell by 2.0% in nominal terms in January 2017 compared with the previous year. Seasonally adjusted, nominal turnover rose by 0.6% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO).

Once again: another record in SNB intervention record for the period after Trump’s election: an increase of 4.7 billion CHF in sight deposits. The trend for EUR/CHF versus parity getting confirmed.

Speculators increased their EUR net short position against the dollar, but lowered their CHF net shorts (vs. USD). This tendency confirms our view that EUR/CHF will move towards parity.

It is difficult right now to talk about the foreign exchange market using the dollar as the numeraire. The dollar was stronger against most of the major currencies last week, but not the yen or sterling. The Dollar Index itself was little changed, rising less than 0.15%.

After adjusting for working days, exports increased by 5.3% (real: + 2.3%) in January 2017, boosted by chemicals and pharmaceuticals. Imports, on the other hand, fell by 1.2% (real: -6.8%). The trade balance loops on a record monthly surplus of 4.7 billion francs.

Once again a massive SNB intervention and a post Trump election record: 4.5 billion CHF at a EUR rate of 1.0648.

Speculators increased their EUR net short position against the dollar, but lowered their CHF net shorts (vs. USD). This tendency confirms our view that EUR/CHF will move towards parity.

Arguments for being long the dollar: FX investors because of the difference in monetary policy (e.g. higher US rates), Bond investors long US Bonds because higher bond yields, On the other side, European and Swiss equities are not so much overvalued as U.S. stocks are.

The Producer and Import Price Index rose in January 2017 by 0.4% compared with the previous month, reaching 100.4 points (base December 2015 = 100). The rise is due in particular to higher prices for petroleum products, scrap and watches. Compared with January 2016, the price level of the whole range of domestic and imported products rose by 0.8%. These are the findings from the Federal Statistical Office (FSO).

A big Swiss bank bets on EUR/CHF 1.10 as soon as the ECB ends their bond buying program. But one should realize that private investors will need to buy the EUR at 1.10, but the SNB is not willing to do so any more. Hence we must see SNB interventions of zero, before EUR/CHF goes to 1.10.

Speculators are net short CHF with 14.6K contracts against USD. This is less than the 17K last week.

We are expecting a further strengthening of both dollar and Swiss Franc against the euro over the next 3 months. Reason is the rising Swiss demand the continued dovishness of the ECB, despite rising inflation.

The reader might have seen the latest Swiss Consumer Sentiment and the UBS consumption indicator. They suggest that the Swiss boom phase should finally come.
I anticipated the boom already in my slides for the CFA Society. The Swiss boom was postponed when the SNB decided to remove the euro peg in early 2015.

SNB intervenes for 2.4 bn CHF, while speculators increase their CHF shorts to 17K.

The Swiss Franc index remained around the 2% gain that for the last month, the recovery from the Trump reflation trade. In this trade, investors preferred U.S. against European stocks. This tendency, however, is reversing now – and with it the franc recovered.

With the strong Swiss trade balance, the SNB let EUR/CHF fall to 1.0680. SNB intervenes for 0.5 bn CHF. Speculators are net short CHF with 13.6K contracts against USD, nearly unchanged.

Speculators are net short CHF with 13.6K contracts against USD. This is nearly unchanged. But net short of Euro and Yen are Diminishing.

The US dollar spent the first month of the new year correcting lower after a strong advance in the last several months of 2016. We argue that the correction actually began in mid-December following the Federal Reserve’s rate hike.

Following a decline the previous year, foreign trade grew again in 2016, with chemicals and pharmaceuticals shaping the trend. Exports climbed by a total of 3.8% (real: – 0.8%) to a record high of CHF 210.7 billion. However, the two other large groups – machinery and electronics, and watches – were unable to participate in the growth. Imports increased by 4.1% (real: +1.2%) to CHF 173.2 billion. The trade surplus reached a new peak of CHF 37.5 billion.

EUR/CHF is slightly above the “in-official minimum band”. The weaker dollar leads to bigger SNB losses in January. SNB intervenes for 0.9 bn at higher EUR/CHF rate. Speculators are net short CHF with 13.7K contracts against USD.

Speculators are net short CHF with 13.7K contracts against USD. This is nearly unchanged. On the other side, the USD/CHF is falling.

The US dollar turned in a mixed performance over the past week. The technical indicators continue to support our expectation that after correcting since mid-December, following the Fed’s hike, the dollar is basing.

The Producer and Import Price Index rose in December 2016 by 0.2% compared with the previous month, reaching 100.0 points (December 2015=100). Inflation was 0.0% in comparison with December 2015. The average annualised inflation rate in 2016 was -1.8%. These are the findings from the Federal Statistical Office (FSO).

The Swiss hotel industry registered 1.9 million overnight stays in November 2016, which corresponds to a slight growth of 0.5% (+9300 overnight stays) compared with the same period a year earlier. Domestic visitors generated 878,000 overnight stays, representing an increase of 0.9% (+7900). Foreign visitors generated 999,000 overnight stays, i.e. a very slight increase of 0.1% (+1400).

EUR/CHF slightly above the “in-official minimum band” of 1.0680 – 1.07. SNB intervenes for 1.7 bn at higher EUR/CHF rate. Speculators are net short CHF with 14K contracts against USD.

Speculators are net short CHF with 14K contracts against USD. This is 1K more than last week. But yen and Euro net shorts are currently diminishing. This could imply that soon CHF net shorts start falling, too.

Registered unemployment in December 2016 – According to the SECO surveys, 159,372 unemployed were registered at the Regional Employment Centers (RAV) at the end of December 2016, 10,144 more than in the previous month. The unemployment rate thus rose from 3.3% in November 2016 to 3.5% in the reporting month. Compared to the previous month, unemployment rose by 743 persons (+ 0.5%).

The Swiss National Bank has announced 24 bn profits from 2016. Profits came from the dollar, yen and Canadian dollar, while the pound retreated by 15%. The EUR/CHF is only slightly weaker, mostly because the SNB actively supported the euro.

EUR/CHF at the “in-official minimum band” of 1.0680 to 1.07. SNB intervenes for 0.7 bn CHF to keep the euro slightly over 1.07. Speculators are net short CHF with 13K contracts against USD, 3K more than last week. This is still far from the post financial crisis record of 26 K contracts. Moreover the net short GBP are increasing again.

Speculators are net short CHF with 13K contracts against USD, 3K more than last week. This is still far from the post financial crisis record of 26 K contracts. Moreover the net short GBP are increasing again.

Energy prices in Switzerland turned around from a minus 2.4% in November to a +6.8% in December. Oil prices had seen its trough exactly one year ago.
Especially in Germany and Spain, this translated into inflation rates, that are close to the ECB target rate of 2%.

Last week’s data: FX: EUR/CHF was between 1.07 and 1.0750. SNB sight deposits: SNB intervenes for 0.7 bn. CHF at the EUR/CHF 1.07 level. CHF Speculative Positions Speculators went net short CHF with 10K contracts, this is still far from the 26.K contracts record.

The sudden adjustment of CHF speculative positions ended (see last week’s post) . Speculators went net short CHF USD with 10K contracts, this is still far from the 26.K contracts record. We should wait for another Fed rate hike, to reach these levels again.

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The Fed has hiked rates and with this fait accomplis speculators sold the news. They closed their short CHF and opened new CHF longs. The SNB, however, intervened again for 0.5 billion CHF.

The expiry of the December currency futures may spurred more than normal speculative position adjusting. The out-sized 27.9k contract jump in the speculative gross long Swiss franc futures position is a prime example.

The small adjustment to Fed’s anticipated path for the Fed funds target helped lift the US dollar to its highest level against the euro since 2003, and to ten-month highs against the Japanese yen. The graph shows that the dollar has improved by 25% against the euro, but only by 10% against CHF over the last 3 years.

The Swiss National Bank uses a strange formula on the basis of economic growth for the provisions for FX losses. It would be much easier to connect this number to the size of the balance sheet, e.g. 10% of the balance sheet.

The net short CHF speculative position is close to reaching new records. Shortly before the end of the peg, speculators were net short CHF by 26.4K contracts. Now we are at 25.4K.

The small adjustment to Fed’s anticipated path for the Fed funds target helped lift the US dollar to its highest level against the euro since 2003, and to ten-month highs against the Japanese yen. The graph shows that the dollar has improved by 25% against the euro, but only by 10% against CHF over the last 3 years.

The Producer and Import Price Index rose in November 2016 by 0.1% compared with the previous month, reaching 99.9 points (base December 2015 = 100). The slight rise is due in particular to higher prices for scrap and petroleum products. Compared with November 2015, the price level of the whole range of domestic and imported products fell by 0.6%. These are the findings from the Federal Statistical Office (FSO).

Who has read Milton Friedman knows that the Trump reflation trade is now showing its positive side. US wages are rising by 2.5%, while inflation is still relatively low. According to Friedman, inflation will increase only later.

The net short CHF speculative position is close to reaching new records. Shortly before the end of the peg, speculators were net short CHF by 26.4K contracts. Now we are at 25.4K.

  Swiss Franc Currency Index The Swiss Franc index remained in a losing position compared to the dollar index. However since November 25, it has remained stable. Given that the ECB extended the QE period, the EUR/CHF has fallen to 1.0730 again.   USD/CHF The US dollar is finishing the year on a firm note.  It rose … Continue reading »

The following is the list of “Russian Propaganda sites”, as published by PropOrNot. Several articles by the Washington Post refer to this list. Many sites on that list are based on libertarian ideas and Austrian economics. Those are in favor of a free market economy, they reject central banks and the establishment. The rejection of the U.S. establishment is possibly the only point that are in common with Putin.

Swiss consumer price inflation remain the lowest in comparison with different countries in the euro zone and the United States. Consumer prices in the U.S. are driven by rising health care costs and asset price inflation in shelter. In Europe, we see the opposite phenomenon: Rents in Italy or Spain are steady or falling. In Germany and Switzerland rent control prevents that asset price inflation moves into consumer prices. In Switzerland, more and more supply is helping to contain housing costs.

In the summer months, the Swiss hotels registered more guests from Switzerland. from the United States and from Europe. But there was a sharp decline of guest from Asia.
100’000 more overnight stays from Switzerland could not recover the decrease of 200’000. One important reason for decline is the weakening Chinese currency, that reduced their purchasing power, in dollar but also in CHF.

Italy has three options: 1. exit the euro zone and devalue the currency; 2. remain in the euro zone and devalue salaries. 3. go for Japan-like decades-long slow growth with stagnating wages, but also with falling inflation and (positive news!) falling bond yields.

The Swiss Franc index continued around its 4% loss since the U.S. elections, while the US Dollar index had a 4% increase. The focus shifts to the ECB meeting, where participants are wary of a “hawkish ease”.

For us the Net National Savings Rate is the best alternative indictator to GDP growth. It is positively correlated with the change in wealth, with the establishment of future productive capacity, the price of government bonds and currency valuations. But today GDP growth is often negatively correlated to the Net Savings Rate. Hence GDP is often a less useful measure.

The net short CHF speculative position is close to reaching new records. Shortly before the end of the peg, speculators were net short CHF by 26K contracts. Now we are at 24.3K.

Switzerland’s real gross domestic product (GDP) has remained almost unchanged in the 3rd quarter of 2016 (+0.0%). Consumption was nearly stagnated, while net exports had a decline. But investments increased by 0.5% on the quarter.

We explained the Trump reflation trade, where the Swiss Franc acts as the usual inflation hedge against the obviously inflationary policies of Trumpeconomics. Trump is about tax cuts – i.e. a fiscal deficit up to 10%, and about protectionism. Trump would restrict global trade and push up U.S. wages.

After a three-week rally, the dollar bulls finally showed signs of tiring ahead of the weekend. At least against the Swiss Franc index, the dollar index could further advance. We had observed SNB interventions in the previous week that kept the euro mostly above 1.07.

The latest data releases from Swiss Statistics shows that health care premiums have risen by 3%, while health care prices for consumers have fallen. The reason may be the oligopoly structure of the Swiss health care system. But also that we consume higher and higher quantities of health care. Or is Swiss Statistics cheating on inflation?

In October 2016, Swiss exports were down 5.6% (in real terms: – 10.4%) against the previous year. Imports rose by 1.8%YoY (in real terms: -1%). The trade surplus diminished, after months of rising exports.

We explained the Trump reflation trade, where the Swiss Franc acts as the usual inflation hedge against the obviously inflationary policies of Trumpeconomics. Trump is about tax cuts – i.e. a fiscal deficit up to 10%, and about protectionism. Trump would restrict global trade and push up wages. According to Lars Christensen Trumpeconomics is also about monetary stimulus: Trump would push for a more jobs and a dovish Fed, same as his fellow Republican Nixon did. He could even replace the “hawk” Yellen.

The US dollar has recorded its best two-week performance since Reagan was President. The weeks after Trump’s election continue to see a weakening of the Swiss Franc, while the dollar index is on a steady rise. Still both the euro and the yen have seen worse performance than the Swiss Franc. The euro is currently under 1.07.

With 4.8%, the Swiss unemployment rate based on the ILO concept is higher than the rates in Iceland (2.6%), Czech Republic (4.0%) and Germany (4.1%), but lower than the ones of the remaining 25 countries. As for youth unemployment, the Swiss are on position three with a rate of 11%, this is half the rate of the Eurozone, or a fourth of the rate in Spain or Greece.

The Producer and Import Price Index rose in October 2016 by 0.1% compared with the previous month, reaching 99.8 points (base December 2015 = 100). While the Producer Price Index declined by 0.1%, the Import Price Index rose by 0.3%. The slight overall increase is due in particular to higher prices for petroleum products. Compared with October 2015, the price level of the whole range of domestic and imported products fell by 0.2%. These are the findings from the Federal Statistical Office (FSO).

The Swiss Franc Index rose sharply, shortly after the U.S. elections. But then the Trump reflation trade came. Trump may fulfills the wet dreams of many economists. With tax cuts he might extend the U.S. fiscal deficit up to 10% per year. This resulted in:
Gains on U.S. stocks, inflows in U.S. Bonds, inflation hedges gold and Swiss Francs.

Swiss consumer price inflation remain the lowest in comparison with different countries in the euro zone and the United States. Consumer prices in the U.S. are driven by rising health care costs and asset price inflation in shelter.

Sight Deposits: show that the SNB has not intervened to sustain the euro, that dipped under EUR/CHF 1.08. We considered the 1.08 as line in sand for the SNB. The odds of Trump are rising. This causes fear and demand for Swiss Franc. The EUR/CHF fell to 1.0750. Speculators were net short CHF January 2015, shortly before the end of the peg, with 26K contracts. Then again in December 2015, when they expected a Fed rate hike, with 25K contracts. We see these net short levels reached again this year, maybe even more. Reason the recently strong U.S. and European PMIs.

Swiss Franc Currency Index As visible in the graph, the Swiss Franc index recovered most of its losses against the US Dollar Index for the last 30 days. In the last 30 days, both the USD currency index and the CHF currency index have had a positive performance.

The weekly speculative position shows increasing short positions on the euro and on the Swiss Franc. On the other side, both currencies have appreciated, what they should not do if net short positions increase. This implies that there is real money, .e.g in the form of cash, bonds, stocks or real estate that is invested in the euro area or in Switzerland. For Switzerland, we will see this in the weekly sight deposits.

Interim results of the Swiss National Bank as at 30 September 2016 The Swiss National Bank (SNB) reports a profit of CHF 28.7 billion for the first three quarters of 2016. But the volatility is rising: The SNB may lose 50 billion in one year and win 60 billion in the next year or the opposite.

We have always emphasized that the SNB intervenes between 1.08 and 1.0850. Even if there was no change in sight deposits the 1.08 “line in sand” broke.

The Swiss Franc Index could recover some of the losses as compared to the US dollar index. Still the USD/CHF remains above 0.99. The US dollar rose against most of the major currencies last week, but the upside momentum appeared to be dissipating, even before the FBI’s announcement about new Clinton emails. There are a few exceptions like the greenback’s performance against the Japanese yen, Canadian dollar, and Swedish krona. The dollar made new multi-month highs against all three currencies in the last two sessions.

The net short Swiss Franc position against the dollar has risen to the levels seen before the breakdown of the EUR/CHF floor.
It has increased from short 9.4 K contracts to 16.4 K contracts.
In the last week, speculators raised their short positions by 15% for both the euro and CHF. Euro longs against USD were up slightly, while CHF longs were reduced.

The Swiss Franc index had once again a bad stance against the dollar index. The CHF index was down 1%. The dollar index, however, improved. The US dollar rose against the major currencies last week, except the Australian and Canadian dollars.

In the third quarter of 2016, the Swiss quarterly trade surplus rose over 10 bn. CHF for the first time in history. Exports rose by 8.1% and Imports by 7.9%.

The Swiss Franc index had once again a bad stance against the dollar index. The CHF index was down 1%. The dollar index, however, improved. The US dollar rose against the major currencies last week, except the Australian and Canadian dollars.

The Producer and Import Price Index rose in September 2016 by 0.3% compared with the previous month, reaching 99.7 points (base December 2015 = 100). The rise is due in particular to higher prices for petroleum products. Compared with September 2015, the price level of the whole range of domestic and imported products fell by 0.1%.

The social partners signing the collective labour agreements (CLA) have agreed a nominal rise in real wages estimated at 0.4% for 2016, of which 0.2% is to be awarded collectively and 0.2% at individual level. Minimum wages were increased by 0.7%. The graph shows nominal wages since 1993.

Privathaftpflichtversicherungen in der Schweiz sind sehr intransparent. Oft steckt der Teufel im Detail, irgendwo in den AGB. Zum Abschluss einer neuen Versicherung sende ich diesen Fragebogen zu verschiedenen Anbietern.

The Franc index lost considerably in the last week, in particularly in comparison to the dollar index. Reason was the exceptionally strong U.S. ISM Non-Manufacturing Index.

The US dollar fell against most of the major currencies in Q3. The Norwegian krone was the best performer, gaining 4.4% against the greenback, followed by Aussie and Kiwi. The Swiss Franc collapsed on Friday at quarter end.

We do not like Purchasing Power or Real Effective Exchange Rate (REER) as measurement for currencies. For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity increases, while REER assumes constant productivity in comparison to trade partners.
In August 2016, Swiss exports were up 7.0% YoY (in real terms: + 1.2%) and imports 8.4% YoY (in real terms: + 5.1%).

The dollar was surprisingly strong this week. This despite a more hawkish ECB, bad U.S. economic data in the ISM surveys.

Speculators are reducing their net short Euro positions, since Draghi’s comments on inflation. Apparently not only against the dollar but also against the Swiss Franc. This also means that the euro zone may be target real money (like purchases of stocks, real estate and bonds) instead of Switzerland.

It took the market a few days to overcome the shockingly poor non-manufacturing ISM (51.4 vs. 55.5). However, by the end of the week, the US dollar bulls had regained the upper end.

During this week the Swiss Franc index lost against both dollar and euro. The CHF index ended one percent down. Despite not convincing US jobs, the dollar index ended in positive territory.

Since 2008 the balance sheet of the Swiss National Bank has risen from 28% to 102% of Swiss GDP. Balance sheets of other central banks have strongly risen, too. But there is one big difference: The risk for the SNB is far higher, the SNB nearly exclusively possesses assets denominated in volatile foreign currency.

After winning 5% against the dollar index last week, the Swiss Franc index lost 3% again. CHF lost against both USD and EUR. Reason: An increased probability of a rate hike in the U.S.

We do not like Purchasing Power or Real Effective Exchange Rate (REER). For us, the trade balance decides if a currency is overvalued. Only the trade balance can express productivity increases, while REER assumes constant productivity in comparison to neighbours. In July 2016, Swiss Exports were up 7.9% YoY (in real terms: + 2.4%) and imports 11.8% YoY (in real terms: + 8.2%). Exporters could even raise prices, as we see in the difference between nominal and real.

The US dollar lost ground against nearly all the major currencies last week. The sole exceptions were the Australian dollar, where Moody’s decision to cut the outlook for five Australian banks wiped out the previous small gain. The Swiss Franc index gained nearly 5% compared to the dollar index.

Swiss National Bank President Thomas Jordan keeps saying the franc is “significantly overvalued.” And that’s despite the central bank’s record-low deposit rate and occasional currency market interventions.

The CHF index experienced its first good week since many weeks, when we compare it against the dollar index. On a three years interval, the Swiss Franc had a weak performance.

Mainstream media often speaks of the great shale gas/oil revolution and how it makes the United States more productive and a net exporter of oil. We wanted to go into more details,we compare oil production costs for US shale and global oil producers. As reason for the cheap oil we see the combination of two effects:

Demand: Cheap US money supported a Chinese investment boom in factories and housing until 2012. The over-investment phase is followed by lower demand growth.
Supply: The Arab countries need to maintain their social welfare systems, increased production, and – more or less deliberately – kicked high-cost fracking companies out of the market.

The robust US employment report before the weekend allowed the dollar to recoup the losses it experienced earlier in the
week against most of the major currencies. The Australian dollar and Japanese yen managed to hold onto minor gains for the
week.

This economic graph is maybe the most important in the last decade.  Service prices are rising, while goods prices have steadily fallen. The main reason for us is the possibility to outsource big parts of the durables supply-chain to China and East Asia. This is where productivity growth happens. Prices of services, however, are ever increasing. …

Continue reading »

Many know that gold is very volatile in the course of year. Gold prices tend to be low in January and rise between July and November. But what are the fundamental reasons behind this seasonality?

The US dollar advance was stopped in its tracks by the
disappointingly weak Q2 GDP figures. The 1.2% annualized growth rate was
roughly half of the pace expected. The FOMC statement earlier in the week did not leave the impression that a September hike was likely, and with the poor growth numbers, the odds were downgraded
further.

The US dollar gained against all the major currencies over the past week. It also rose against many emerging market currencies. A notable exception was the Chinese yuan.

GDP growth is a bad economic measure. GDP growth in the form of consumption-driven (hyper-) activity (aka Bawerk’s “GDC” Gross Domestic Consumption) must finally lead to a depreciating currency, inflation, falling government bond prices and wealth in real terms. Instead, GDP should be driven by investment and the consequent improvements in productivity.

Many people think that Switzerland is related to gold due to its inflation-hedging safe-haven status. Historically this is true. With rising U.S. inflation in the 1970s gold appreciated to record-highs. So did the German Mark and even more the Swiss franc, that maintained low inflation levels.

A big part of Swiss consumption is imported from Germany. Therefore Swiss inflation is often correlated to German inflation. Capital flows often move to Switzerland and Germany at the same time.

Our weekly review of currency movements, with focus on the Swiss franc. This week: The US dollar is easily the most traded currency, and despite the plethora of other currencies, it is on one side of nearly 90% of all trades. Yet the movement in the foreign exchange market presently is not so much driven by the dollar as it is by other currencies.

In the Brexit month, the Swiss franc index clearly underperformed the dollar index. The major reason is that the dollar is seen as a better safe-haven than the Swiss Franc, possibly because Swiss sales are affected more when British demand falls.

Positive job data in the United States are typically positive for both USD and EUR, because the odds of a rate hike are increasing. Consequently the EUR/CHF rose. In the last two days SNB interventions should have been smaller. The Swiss unemployment rate fell from 3.5% to 3.3%.

On a three years interval, the Swiss Franc had a weak performance. The dollar index was far stronger.
Contrary to popular believe, the CHF index gained only 1.73% in 2015. It lost 9.52% in 2014, when the dollar strongly improved.

The British pound has been hammered to fresh lows just above $1.3115. The euro is moving toward GBP0.8500. The immediate catalyst is three-fold. First, one of the UK’s largest property funds has moved to prevent retail liquidation. Second, the BOE reversed an earlier decision on the capital buffer for banks, which is tantamount to easing policy by boosting the banks’ lending capability by as much as GBP150 bln.

SNB intervenes for 6.3 bil francs in the week ending last Friday. Once again a record high since January 2015. The SNB raised the intervention level to 1.0850. Apparently conversion of GBP->CHF flows into GBP-> EUR flows – via EUR/CHF purchases. Speculators: are long CHF 10K contracts against USD versus 6.3K last week.

Week after Brexit.: The Swiss franc (-0.3%) and the yen (-0.5%) were the worst performers, as so-called safe haven buying was reversed.
But the Swiss Franc index is still stronger in the last month than the dollar index.

EUR/CHF finished the week after Brexit with slight improvement of 0.18%. The scare mongering by the Swiss media was misplaced. The euro even recovered from a dip after BoE governor Carney’s comments on Thursday. We do not see strong SNB interventions at this elevated price level. We judged that the interventions happened below 1.08.

Iceland has gained the admiration of populists in recent years by doing that which no other nation in the world seems to be willing or capable of doing: prosecuting criminal bankers for engineering financial collapse for profit.

The papers from the Reserve Bank of New Zealand describes in easy words where central banks should intervene based on economic history and experience. It avoids the often used econometric considerations. For FX rates those often do not incorporate sufficient long-term data.

The dramatic reaction to the UK decision to leave the European Union has changed the technical condition in the foreign exchange market. The EUR/CHF peaked shortly before the Brexit referendum, when traders were anticipating a yes. It found its trough when the No was published. Then the SNB intervened.

Most economists, like the ones at the Swiss National Bank (SNB), claim that the franc is overvalued. Many use misleading Purchasing Power Parity (PPP) measures like the Big Mac index, the OECD index or the PPP based on consumer prices for computing fair values.
The second big mistake is to compute the Real Effective Exchange Rate (REER) with the wrong “base year”The third error is to ignore massive Swiss current account surpluses, helped by high savings and by immigration of cheaper highly qualified personnel. Both help to reduce unit labor costs and achieve productivity gains. Eventually the ex-post FX evaluation based of capital flows in the balance of payments should clearly take precedence against the ex-ante FX evaluations REER and PPP, that are obviously misleading for the franc.

The Swiss Franc was the strongest currency. The euro fell from 1.0877 to 1.0808. Two fundamental reasons:
Speculator anticipate that German investors buy Swiss francs in response to the court decision in favor of the OMT and the positive ZEW.

Recently I enumerated the different drivers for the continuing strength of the franc. Most commentators mentioned Brexit fears, but I insisted on the low rate and yield environment in the United States after the last Non-Farm Payroll report and the FOMC.
Today’s jump in sterling confirmed my view. This anticipation of an Anti-Brexit vote was not followed by a franc decline against USD. This also implies that a Brexit will not entrench a huge strengthening of the franc.

Two main events that drove the foreign exchange market. The first iare some post-FOMC meeting movements and the assassination of Jo Cox, that might be positive for the Anti-Brexit camp . The EUR/CHF has fallen down to 1.0774 and recovered.

Massive surprise in the US job report was reflected in currency rates. The EUR/CHF surprisingly increased, despite weak US data. This reflects the fact that the ECB is currently considered the most dovish central bank. The dollar lost 2% against the yen, 1.6% against the euro and 1.3% vs. the Swiss franc.

Q/Q GDP growth: +0.1%, YoY GDP growth: +0.7%.
Until 2014, Swiss GDP was driven by net exports: Exports were rising more quickly than imports, which improved GDP.
Positive change in the trade balance in goods: +8.1% YoY exports, +1.4% YoY imports in Q1/2016.
Negative change in the trade balance for services: export +2.0%, import +6.7% YoY
In 2015 and in Q1/2016 the main GDP drivers were consumption (+1.3% YoY in Q1/2016) and investment (+2.1%).
Government consumption and inventories lagged in Q1/2016, they dragged down GDP to 0.1% QoQ.

Authorities in Switzerland and Singapore are punishing BSI, the private bank based in the Ticino region of Switzerland, for alleged money-laundering offenses, shutting their activities in Singapore and seizing part of its profits.

The United States spends 17% of GDP for health care, compared to around 10% in many other advanced economies. Thanks to rising health care costs, GDP growth was higher in the U.S. in recent years. The question is if this kind of GDP growth enriches the whole population or only the privileged.

A share of 20% equities is too much for a conservative investor.
– She increases the CHF debt with continuing interventions at a pace of 10% per year.
– yield on bond investments is less than 1% p.a. and equity markets might not improve a lot any more.
– Expensive dollar: she bought U.S. equities when the dollar was relatively expensive.

SNB Results Q1 2016: Two thirds of SNB profit comes from Gold. Deflation helps with higher bonds prices and profit on negative interest rates.

The Q1/2016 update on the SNB investment strategy and its assets.
The Swiss National Bank is a passive conservative investor. As opposed to other investors, the exposure in currencies is as important as the strategic asset allocation according asset classes (bonds, equities, cash, real estate). The importance of currencies is one reason why the SNB is often called a hedge fund, the second the volatility of gains and losses.

Speculative position: Speculators are even longer CHF (against USD): +9410x 125K contracts.
Sight Deposits: SNB intervenes for 6.4 bln. CHF in only three weeks. Sight deposits (aka debt) are rising by nearly 1% per month, this is 10% per year. The SNB can never achieve such a yield on investment, her yield is between 1 and 2 percent. Is the bank running suicide again?

Fauke Petry, leader of the Alternative for Germany (AfD), believes Germany “needs more Switzerland … more democracy” and that Switzerland is some way ahead of her country when it comes to a “culture of democracy”.

We show the history of Japanese FX interventions. The Japanese only intervened when the USD/JPY was under 80. Therefore the 2016 FX intervention threads at 108 are ridiculous.
As opposed to the Swiss National Bank, the Japanese only talk, they do not fight.

Speculative position: Strong shift to CHF long: +4967x 125K contracts after the Fed reduced their expectations of rate hikes for this year. …………Sight Deposits: SNB intervenes for 6.1 bln. CHF during the month of March. This is the higest level since January 2016. ……….FX: EUR/CHF steady slightly over 1.09. As I expected last week, the EUR/CHF …

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We examine the SNB monetary assessment statement of March 17 and the Swiss economy. We explain why negative rates may be a “toothless measure” if a central bank wants to weaken a currency. They have rather an inexpected consequence, they slow down GDP growth, in particular for banks and pension funds.

The Swiss National Bank (SNB) is reporting a loss of CHF 23.3 billion for the year 2015 (2014: profit of CHF 38.3 billion). The loss on foreign currency positions amounted to CHF 19.9 billion. A valuation loss of CHF 4.2 billion was recorded on gold holdings. The profit on Swiss franc positions was CHF 1.2 billion.

According to the latest news release, the Swiss National Bank expects an annual loss of 23 billion CHF, after reporting a loss of 50 billion at the end of June. Primarily thanks to the stronger dollar, the SNB was able to achieve unrealized gains of 27 billion CHF in the second half. This reduced her annual loss to 23 billion. With its rate hike, Fed is helping the SNB: the dollar has appreciated by 6% since July.

For George Dorgan the “Swiss Franc Shock” celebrated by the Swiss press did not affect the Net Exports component of Swiss GDP, but it rather suppressed growth in consumption. Therefore the Swiss economy could not replace lost export jobs by new jobs in the internal economy.

Weekly SNB Intervention Update: Sight Deposits and Speculative Position

In December 2015, the seven year Joseph cycle ended with a Fed rate hike. These lean years of the Joseph cycle started in December 2008 when the Fed lowered rates to the current level. We think that in the next seven year cycle, even the risk-averse Swiss investors will buy more foreign assets, not only the central bank and speculators. Different crises have passed in the three parts of the world, the U.S. subprime, the euro crisis and the Emerging Markets crisis. The last one culminated in the Russia crisis and the end of the peg in January 2015. At the CFA Society in summer 2014, I predicted the end of the EUR/CHF peg. This time, however, I foresee a weaker Swiss franc

After several years of moderate growth, exports (-2.6%) and imports (-6.9%) fell in nominal terms in 2015. Nevertheless, exports were at their third-highest level ever at CHF 202.9 billion. Prices clearly declined, particularly for imports, against the backdrop of the strong Swiss franc.

Our analysis of the forecasts of economic data for 2015 shows that the Swiss banks were too optimistic for most data. US growth, the oil price, inflation and interest rates are far lower than expected. The errors for stock indices were smaller.

Monetary assessment meeting Swiss National Bank: My real-time tweets contain the main important points of the SNB meeting from the view of investors or FX traders.

The SNB monthly bulletins contain all important data of the SNB and the Swiss economy as of the latest quarter.

We explain the risks on the rising money supply in Switzerland. We distinguish between broad money supply (M1-M3) and narrow money supply (M0). Both are rising quickly.

Swiss GDP increased by 0.2% q/q and by 1.2% y/y. Once again, investments on equipment and software (+3.6%) was one of the main drivers. For many economists investment on equipment and software is the most desired GDP growth component.

According to the figures of Swiss Statistics, the Swiss trade surplus rose by 10.4% in 2014. Therefore its contribution to the 2014 real GDP is higher than 50%. Private consumption lagged compared to the other components of Gross Domestic Product.

Collateralisation reduces the credit risk on repo, which in turn can reduce the capital charge that regulators impose on lending cash. However, collateral has operational and legal risks, which means that, notwithstanding the comfort given by collateral, the primary concern in a repo should always be the creditworthiness of the counterparty. This is one of the lessons of the current market crisis.

Both Chinese PMI and the producer price index (PPI) are in deflation since 2012. This opens a lot of questions about the sustainability of Chinese economic growth, but also about the certain economic theories that consider deflation as a precursor of depression, as it did in the early 1930s. China’s speed of economic growth simply slows, recently to 7%, according to China statistics “China’s Economy Showed Moderate but Steady Growth”.

Many claim that China manipulates its economic data. We explain why the best way not to get caught is to lower the GDP deflator, as lower inflation helps to increase real GDP. Lombard Street Research assumes that Chinese officials followed that approach.

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SNBCHF.com most important posts about the Swiss National Bank

For us the five major drivers of government bond yields are:
Inflation expectations and inflation: The by far most important criterion. High inflation expectations must be compensated via higher bond yields. The main driver behind inflation expectations is the wage development, this is the form of inflation that typically persists. Price inflation follows inflation expectations with a certain lag.
Wealth: The higher the wealth of a country, the lower the bond yields. Wealth is typically increased by high savings.
Regular and irregular influences on bond yields by central banks: Regular: Central banks buy government bonds, in particular in US Dollars, the world reserve currency. Irregular: Central banks buy bonds of their own government and depress yields – the “quantitative easing”.

If a country has relatively low wealth then foreigners must help with the purchase of bonds and the following factors become relevant:
Foreign debt relative to GDP: Foreign bond holders want higher yields against risks (e.g. currency risks) of holding foreign assets.
The net international investment position (5a) and change in this position, namely the current account balance (5b).

Deutsche Bank’s George Saravelos was one of the first to use the term “euro glut”. He anticipated a massive capital outflow from Europe that countered the huge European current account surplus. The Euro glut also led to the end of the EUR/CHF peg. Reasons are missing investment opportunities in Europe despite the high savings rate.

Latest update for June 2015: The pace of SNB intervention is slowing. Sight deposits, the indicator for SNB interventions, rise by 0.5 billion francs per week.
April and May: Sight deposits rise by 1.5 billion CHF per week. Thanks to this intervention the SNB is able to maintain the EUR/CHF around 1.0450.

George Dorgan shows that Gross Domestic Product (GDP) is a measurement in the local currency. Effectively, Swiss real GDP rose by 15% in Euro terms, but fell slightly in CHF. He also emphasizes that Switzerland needs a big rebalancing of its economy, away from exports towards consumption. The Swiss National Bank was right to remove the euro peg. The move towards consumption is only possible when the Swiss franc is stronger because consumers will profit on it.

We show the two phases or “two innings” of Swiss franc appreciation: The risk aversion phase and the high inflation phase.
With the weakening of emerging markets and the strengthening of the United States in 2013/2014, the Swiss National Bank (SNB) had won the first battle in the war against financial market, the “risk aversion game”, the first inning in two-part match. Risk aversion is lower because the United States recovered with weaker oil prices.
The “inflation game” started earlier than we expected, at least in the eyes of the Swiss National Bank, namely in January 2015. They anticipate higher inflation that will come with rising wages in the United States and Germany.

In this post we will show the history of the Swiss Franc until 1971, a monetary era driven by the gold standard and the Bretton Woods period, both periods with nearly fixed exchange rates.

In the new series George Dorgan suggests that the euro crisis is a temporary development but not a long-lasting crisis. In the first part he shows that Spain actually created a lot of jobs in last twenty five years.

The Safe-haven government bond bubble did not pop, but Italy or Spain have become low yielders as well
Government bond yields under 10 years for safe-havens are close to zero. In April 2013, even 20 year bond yields are less than 3%, What can explain this bubble of the century?

(post written originally in March 2013)
We reckon that the Swiss National Bank (SNB) will have issues maintaining the EUR/CHF floor in the longer term, because the expected yields on Swiss investments abroad will not be sufficiently higher than the yield on investments in Switzerland. Because of this insufficient risk-reward relationship, outflows in the capital account of the Swiss balance of payments will not cover the persistent Swiss current account surpluses. Only strong outflows in the capital account may lead to a carry trade that may make SNB interventions obsolete.
We judge that the balance of payments model is the only useful ex-ante estimation and ex-post FX rate valuation.
Other ex-ante FX estimations like the Real Effective Exchange Rate for the Swiss franc need to be rejected.

Money creation and sight deposits may have two points of view:
1. The central bank creates money – i.e. the SNB decides to increase sight deposits when it does currency interventions
2. Commercial banks create money – inflows in CHF on Swiss bank accounts make those banks increase their “sight deposits at the SNB. If inflows in CHF are higher than outflows then CHF must rise, unless the central bank does currency interventions.
We will present both alternatives.

This IMF data on the SNB website shows SNB Forex and gold reserves in the last month. It is so-called “IMF Special Data Dissemination Standard (SNB Data)”

In his first response to the Swiss financial tsunami on January 15, George Dorgan suggested that the EUR/CHF of 1.10 will not be reached any time soon. He explains where the SNB should intervene and if they sell Euros and dollars.

Libertarians close to UP Schweiz (Swiss independent party) ridiculed the Green Liberal Party, GLP and the Pirate Party as being in favor of the state and left-wing, hence not libertarian. George Dorgan suggests that both GLP and the Pirate Pirate are pretty close to UP, hence all three are libertarian parties. He thinks that the discussion if one is “Left” or “Right” needs to be left out completely, when we speak about liberty.

The concerted actions in September 2012 between the two big central banks reflected two fundamental economic principles: The Fed opted for Keynes’ law, the ECB for Say’s Law with conditionality. And apparently the ECB was successful.

The four best US economic indicators, in form of concurrent indicators, can be seen at Doug Short, here in detail.

We compare aspects of the Net International Investment Positions for Italy and Switzerland

In this post we give a comparison of breakeven prices by major investment houses for different shale oil fields and different opinions on it

The effects of so-called “currency wars” and other central bank actions are small compared to the long-term impact made by these five catalysts, which include credit cycles, trade balance, differences in economic growth, and more.

We indicate the main factors that influence FX rates in the longer term. We explain the movements of currencies based on these factors.

German spending is one factor that drives currencies in Northern Europe.

An economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency’s purchasing power.

The OECD purchasing power parity compares consumption prices in different countries.

The following table compares the Big Mac and the Starbucks Tall Latte index among different countries. It explains the issues with these measurements.

Typically poorer countries have a basket with a higher weight for food and other consumption goods, but richer states give them a smaller weight. Here the full details over different countries

The best posts by Marc Meyer, the biggest and most influential enemy of the Swiss National Bank. He regularly published in German on InsideParadeplatz.ch

Selected essays on the end of the EUR/CHF peg

The weighted average of country’s currency relative to index or basket of other major currencies adjusted for inflation. We explain the Real Effective Exchange Rate for the Franc, the Yen and Renmimbi

If we calculate Real Effective Exchange rates on the base year 1965, the Japanese yen remains the most overvalued currency.
This analysis is based on the real effective exchange rate (REER) provided by the Bank of International Settlement (BIS) and a consumer price-index adjusted exchange rate.
The real value of the yen is around 50% higher than 1965, the same applies to the Swiss franc.

In August 2013 the Bruegel blog offered one of the best comparison of long-term real effective exchange rates (REER). The data is CPI based and therefore not as good as the producer price index (PPI) that reflects tradable goods better.
However the data is huge with three different sources – BIS, World Bank, Eurostat, OECD and Bruegel. The data indicates how the real value of the currencies of China and many other Emerging Markets (EM) have improved against 1995. In order fulfill basic needs like food, transportation and housing, this expansion required more and more commodities. By consequence the commodity producers Canada, Australia, New Zealand, Russia, Brazil and OPEC countries but also less known oil producers like Angola, Guatemala, Honduras, Sudan went into a boom.

In this chapter we connect three related concepts: inflation, central banks and interest rates.

The interest rate parity gives a mathematical explanation for the purchasing power parity and real effective interest rates

Carry Trades, Central Bank Interventions, Fundamental Data, mean reversion, Momentum Trades, Overshooting, trend following

Gold and silver are the most complicated assets to price. Stocks, currencies, commodities mostly depend on their fundamental data, supply and demand. Gold and silver, however, are priced indirectly.

In Switzerland the ordinary people have started several initiatives to protect their savings against the establishment. After the first gold referendum failed in November 2014, a new gold initiative is trying to introduce a gold-backed Swiss currency, as parallel currency or investment vehicle.
With the end of the EUR/CHF peg and the apparent risks caused by the SNB, the importance of the Gold Franc initiative has increased. Different groups want to introduce parallel currencies in addition to the Swiss franc. CHF is based on fractional reserve banking and, according to the critics, its quantity is increasing too rapidly.
A sound money initiative (German “Vollgeld”) wants to abolish fractional reserve banking, while the new gold franc initiative desires a gold-backed currency. Already now, the so-called WIR money (“Our Money”) is a local currency created during the Great Depression. “WIR money” allows borrowing and lending, in particular for real estate. It is fully backed by commodities, like real estate. By law, parallel currencies, like WIR money, are not legal tenders. Due to a lack of convertibility into foreign currency, WIR money trades at a slight discount to the Swiss franc. This, however, might change when the SNB gets further into negative equity.
In the following we will compare the two gold initiatives.

The Balance of Payments is the sum of current and capital account. The Balance of Payments model states that a currency appreciate when the Balance of Payments is positive. We give an explanation in around 400 words, that clarifies the relationships.

George Dorgan explains why currencies of countries with trade surpluses must appreciate over the long-term. Thanks to these surpluses, inflation and costs of companies rise more slowly than in other countries. In Forex a mean reversion does not exist, but only an inflation-adjusted reversion to the mean: a real exchange rate mean reversion or in short the “real mean reversion.”

We will apply the balance of payments model for determining FX rate movements and FX interventions by central banks.

George Dorgan extends the previous discussion on trade surplus countries. Now he explains the Penn and the Balassa-Samuelson Effect. He applies these principles to Germany, to Greece and to Switzerland.

Private savings finance public deficit and current account surpluses. Important for understanding the euro crisis and the drivers of government bond yields.

Economic freedom, immigration and high savings are main drivers for strong currencies. Switzerland, Singapore, Norway, Sweden and in the future even Germany are examples. Strangely most are in Europe.

It was tweeted out and annotated by James Plunkett and it’s based on a chart from inequality economist Branko Milanovic.

This page discusses two closely related concepts: the carry trade and the reverse carry trade.

The EUR/USD is going on its longest winning streak for a long time. Since May 27, it has improved from 1.2850 to 1.3396 and is approaching 1.34. What are the reasons?

The Asset Market Model implies that a currency will be in higher demand and should appreciate in value, if the flow of funds into financial market of the country such as equity and bonds markets increase.

Direct or indirect intervention is credible only in countries where domestic asset prices are undervalued and CPI/asset price inflation are no issues. Otherwise they create medium-term risks.

Availability of funds (wealth and the international investment position): One of the 5 key indicators for FX rates. Often currencies of countries with a a lot of funds appreciate when markets decline.

A comparison of the net international investment position (NIIP) of several countries. We explain why asset valuation effects this position at the example of the United States.

The yen overshot during and after the financial crisis. The USD/JPY fell from 120 in 2008 to lowest levels of 74, by 62%, but rose to 102 again. What are the reasons?

We extended our existing post to contrarian investing. It was published on Seeking Alpha and awarded the Editor’s Pick.
Gross Domestic Product(ion) is (or has become) a measurement of activity and consumption, but not of capital accumulation and production.
In many cases, GDP growth is negatively correlated to saving. Higher savings (aka austerity) leads to lower GDP growth today, but to higher GDP in the future.
In its worst case, GDP growth could be completely based on credit, eliminating the capital basis of a country (example Greece).
FX rates are less driven by GDP but by savings and investments, in particular on the corporate side, by investors and micro-economic indicators.
In addition to micro-economic indicators like price to cash flow or price to book ratio, the saving rate is the best macro-economic indicator of the investment style called “contrarian investing.”

Read our contrarian insights: We provide regularly contrarian indications to technical Forex movements. Trade after work and do not look at markets during the day, third read scary facts about stops.

In our view the Swiss franc is not a pure Safe-Haven, but a “Safe Proxy for Global Economic Growth”. Global investors want to participate via the purchase of safe Swiss multi-nationals in global growth. This means inflows into Swiss franc denominated assets. Together with the big Swiss trade surplus, this implies a stronger franc. China stands for global economy, its slowing growth has a negative influence on the profits of Swiss multi-nationals and is therefore negative for the franc.

Arguments in favor of and against the Swedish Krona,as safe-haven during the euros crisis. Extracts from tradingfloor.com

In this post we give our (Swiss) view for the financial tsunami on January 15.
The SNB has preferred its secondary mandate, namely financial stability, and the elimination of risks on its own balance sheet caused by ECB QE.
It will not obey its primary target, price inflation, for the next three to five years. While in the mid-term (5 -10 years) inflation should move up.
Differing perceptions between Switzerland and the Anglophone world about “price stability in the medium and long-term” is the second explanation for the financial tsunami.
The massive trade surplus of 10% of GDP is the third reason.

The Swiss National Bank reported a profit of CHF 38 billion for the year 2014. They obtained price gains in all asset classes, in bonds, stocks and gold. Interest payments and dividends achieved a yield of 1.7%.

In the following we present the drivers of Swiss price inflation. We first present the components of the consumer price index. Then we explain which are upwards-drivers of inflation and which ones cause downwards adjustments.

We are currently looking for an curator of this category. The aim is explain how to obtain sustainably nice returns on stocks and bonds. The focus here should be also on global macro. Sustainability is key: “buy today and sell far in the future”, for example when you get retired. Publicity for own books or publication is allowed.

The following table compares the dividend yields for blue chips in the SMI, DAX and Dow Jones.

Blog entries on the SNB that got last updated in 2014

Blog pages last updated in the year 2014 on the Swiss Franc.

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Composition of the Fed’s Federal Open Market Committee (FOMC composition), needed to know if the Fed is opting for quantitative easing or not.

The main drivers of demand for Swiss francs are the euro crisis and, even more, the behavior of American investors, who go out of the dollar in the fear of bad US economic data and/or Quantitative Easing (QE). Risk-friendly investors move into risky assets like stocks or currencies of emerging markets, while risk-averse investors fear inflation and buy inflation-resistant assets like Swiss francs.

European national central banks released European household wealth reports in Spring 2013. According to that data, “median” German households were far poorer than many of their European counterparts. Based on 2012/2013 data we compared apartment prices and discovered that French prices were strongly overvalued or German ones undervalued.
We wanted to know if this is still the case in 2014 and integrated our 2012/2013 data with the one of 2014. We discovered that German home prices are quickly recovering their delay against French ones. Hence German wealth is ticking up again.

Dear friends and readers, Christmas is family time. But since my blog is contrarian, you read here a contrarian family post by one my idols, Lars von Trier. I just want to thank all my loyal readers and followers for following and commenting on my blog and any discussion on Twitter. Since the blog is driven by …

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The Swiss National Bank has introduced negative interest rates. They apply only to sight deposits in excess of 20 times minimum reserves. Therefore they will affect hardly any bank and can be considered symbolic or even toothless. The view of the SNB is different.

We judge that negative or close to zero yielding government bonds reflect three points: Risk off environment, long-run currency gains on currency with low inflation, insufficient supply of government bonds for bank refinancing purposes.

In a referendum, the Swiss had to decide about:
1) Ecopop, an ecological-political movement that wants to limit immigration to 0.2% of the population.
2) Abolishment of tax advantages for rich foreigners.
3) A gold initiative.
All three initiatives were rejected, the gold initiative by 78%.
George Dorgan summarizes the outcome. He explains what it means for gold, CHF and the SNB. He argues that the next economic cycle will be driven by stronger wage growth in Germany and in the United States. He argues that in some years time the major enemy of the SNB will become inflation that is caused by rising Swiss asset prices and rents and from inflation spill-overs from Germany and the U.S.

The SNB will finally react according to the proposal raised by Prof. Janssen, a major supporter of the gold initiative: with a managed currency appreciation.

Heterodox economic theories focus on the human desires to spend, to save, to obtain credit in order to anticipate spending and future earnings, to increase or to reduce debt or even to deplete existing savings, on human behaviour. Those theories neither think that humans are rational nor that markets are efficient.

Der frühere UBS-Banker und Ökonom George Dorgan sieht in der Debatte um die Goldinitiative vier Fronten aufeinander prallen. Dabei wird die Abstimmung über das Schweizer Gold immer mehr zu einem Entscheid über den Fortbestand oder die Abschaffung des Euro-Mindestkurses.

The recognized Austrian economist Keith Weiner and the Wall Street Journal argue that the SNB must keep the euro over 1.20 in order maintain stability in the Swiss banking system. A rapid appreciation of the franc would create losses on the balance sheet of Swiss banks.

To find further explanations as to why the gold price was weak in the late 1990s we analyze sector balances. Effectively private spending and private debt went in two different directions: a heavy increase in private spending and debt in the US against less growth in private spending and less debt in the rest of world. This combination fostered GDP growth in the US and weakened it in other countries. Real interest rates were positive. Markets thought that the debt-financed growth could continue for years; they created the dot com bubble on top of it that strengthened technology stocks and the related currency, the dollar. This rare situation led to excessively weak oil and gold prices.

High inflows of around 400 billion francs between 2009 and 2012 in the Swiss balance of payments could only be countered with an increase in reserve assets and interventions by the Swiss National Bank. This number is far higher than the one seen during the collapse of the Bretton Woods system, when the ten times bigger Germany had to buy reserves for 71 billion German Marks (at the time around 56 billion CHF). We look at the detailed history of these interventions.

Das Thema der “Abstimmungs-Arena” im Schweizer Fernsehen war „Gefährdet die Gold-Initiative die Handlungsfreiheit der SNB“? Dieser Blog versucht zu vermitteln, dass die SNB ihre Handlungsfreiheit im Sinne der Einhaltung der Preisstabilität schon im September 2011 verloren hat, als sie den Euro-Mindestkurs einführte.

Latest gold referendum poll November 19: The latest poll shows 27% surely in favor of the gold initiative, 36% surely against the initiative. The most important development is the decision of the gold initiative to actively fight against the SNB’s minimum euro rate.

According to the latest polls 38% of voters would support the Swiss gold initiative, 47% are against it. The previous poll, recognized as more reliable, showed 45% pro gold and 38% against.
A win of the initiative would most probably imply a breakdown of the EUR/CHF floor.
According to the polls, low income groups are in favor. Effectively their purchasing power would increase when the CHF appreciates.
High income earners and stock owners are rather against it. If CHF improves Swiss stocks could collapse; this explains their voting intentions.

The place of birth of the Ukrainian leaders give us hints where the country is headed. Most of them come from the very West of Ukraine, from places that formerly were part of the Austrian-Hungarian empire, of Poland or Romania.

Already in 2013, the Swiss National Bank (SNB) spoke out against the gold initiative and revealed that the Swiss gold is stored mostly in Switzerland and 20% in the UK and 10% in Canada. There is no Swiss gold in the United States according to SNB chairman Jordan. In this post we provide an exchange of Jordan’s arguments against the ones of the gold initiative. We also state our view that is not as strict as the one of the referendum proponents.

On this page we show that
Inflation expectations and wages drive the behaviour of the Fed and Treasury bond yields.
Excessive wage increases lead to recessions, more or less voluntarily caused by central bank tightening
Central banks pin down the short end of the yield curve, while financial-market participants price longer-dated yields
Some Emerging Markets seem to copy strong wage increases and inflation that we lived in the 1970s
Quickly rising higher wages in emerging markets may narrow their competitive advantage against the U.S. and Europe
Therefore the “secular stagnation” might not be so long as expected.

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George Dorgan held a presentation at the CFA society in Zurich on September 1. The subjects of his speech were:
Reasons why the EUR/CHF exchange rate will fall under 1.20 once the deflationary pressures in Europe have ended
The missing link in the CFA program between its chapters on micro-economy, macro and currencies
Does history repeat? From Bretton Woods to Bretton Woods 2 and its slow end. Why the unexpected, the black swan happens more often than you think.
The slow end of Bretton Woods 2: rise and fall of the global carry trade and debt-driven growth
The contention that the Swiss franc must depreciate is often based on a simplified view on currency drivers and on “solely” one piece of the balance of payments. An evaluation must take place in full assessment of all drivers.

In this Cross Asset Global Macro Analysis we name our reasons for the current dollar strength. The main causes are ECB’s euro “downtalk”, tight monetary policy in Emerging Markets, rising savings of the aging populations. This leads to weak global spending and growth. With the help of Fed-financed higher asset prices and falling gasoline prices, …

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Will the SNB be able to survive an upturn in inflation: We focus on income and yields for foreign exchange position and gold and find out if the SNB makes enough income to survive a franc appreciation.

Before the upcoming SNB monetary policy assessment meeting on June 19th, rumors started the SNB could follow the ECB and set negative rates on banks’ excess reserves. We would like to deliver the whole background, starting with the question why Swiss inflation has been so low in the past and why CHF always appreciated.

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Monetary policy is and remains tight in Emerging Markets, in particular since many of their currencies collapsed in summer 2013. This created inflation and led to lower spending. We want to find out which stock indices in the developed world have which exposure to Emerging Markets.

Das deutsche Zeitungswesen ist gleichgeschaltet und schreibt und kopiert die gleiche Propaganda, egal ob FAZ, n-tv.de, Spiegel, Süddeutsche, Focus oder das Staatsfernsehen (ARD & ZDF). Seiten wie compact online, Cicero, Deutsche Wirtschaftsnachrichten des Kopp Verlag sind aber dann wieder zu polarisierend. Es fehlt eine Zeitung von Qualität, die wirklich neutral informatiert und Meinungen vergleicht.
Es bleiben nur das Handelsblatt und die Schweizer Weltwoche als relativ neutrale Medien. Die Zeit ist noch einigermassen ertragbar.
Der Herausgeber des Handelsblatt hat in “Der Irrweg des Westens (Ложный путь Запада)” die Propaganda der Mainstreammedien kritisiert, ohne auf die stark polarierende Sicht von Compact “Querdenker jenseits von Links und Rechts” zu schwenken. Wahrscheinlich als Reaktion dazu hat die Frankfurter Allgemeine Zeitung (FAZ) anfgefangen über sich selbst zu reflektieren
Ich persönlich lese mittlerweile mehr die FAZ-Kommentare, da diese häufig eine bessere Qualität haben als der FAZ-Artikel selbst. Ein Auszug.

We name thirteen macro-economic reasons why Russia is currently the best place for contrarian investments.

The Bubble Bubble is produced by economic analyst and Forbes columnist Jesse Colombo, who was called one of the “Ten People Who Predicted the Financial Meltdown” in 2008 by the London Times.

Despite macro-prudential measures like the countercyclical capital buffer, Swiss credit to the private sector is rising more quickly than previously. On the other side, real estate prices are not increasing so rapidly any more. Global risks let M3 money supply growth slow in June 2014.

The second part on Net National Savings in % of gross national income, our preferred alternative indicator to GDP. This part contains the consumption-driven economies, which are Latin America and our Western countries

Swiss parliament member Lukas Reimann outlines the importance gold. In a future inflationary environment, prices of SNB holdings, the ones of German Bunds and US Treasuries will drop, while gold will appreciate.

The ECB commitment to a weak euro and the maintenance of ultra-low interest rates, was a nice (temporary) gift for the Swiss National Bank (SNB). The bank earned nearly 12 billion francs in Q2/2014.

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strong suspicion that Ukrainian air control deliberately facilitated and enabled the shot-down. Combining Western and Ukrainian propaganda with pro-Russian propaganda helps. In each piece of “manufactured or exaggerated news” there might be a bit of truth. Still there is only one party to this conflict that has to gain from a deliberate blowing up of MH17, this is not Russia or the so-called “Donezk People’s Republic”.

In summer 2013, even the sceptical and “gold-friendly” economist John Mauldin followed the mainstream thinking that fracking and other technology could reduce OPEC’s and the Chinese advantage in global trade and reduce the U.S. trade deficit. Recently both claims got refuted: the first with WTI crude oil prices rising to nearly 108$ despite enhanced supply. Detailed data showed that rising U.S. industrial production was not caused by more manufacturing but by mining and the oil industry. We think that any way the U.S. current account deficit could effectively shrink. The reason, however, is that the savings rate of Americans could rise further and the balance sheet recession continue. Traditionally currencies appreciate with higher savings (in local currency) and depreciate with more spending.

We recently explained that China will overtake the United States not only for GDP but also for wealth. In this post we explain what is still missing to become a world reserve currency and how quickly this could happen.

We examine how long the U.S. Dollar will remain the unique world reserve currency. The most important criterion for being a reserve currency is wealth. While China has recently overtaken the U.S. as for inflation-adjusted GDP, in the next step, it will overtake the U.S. as for wealth.

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Inflation expectations drive the Fed’s and markets behaviour. Bond yields adjust, often but not always, with an inflation premium against short-term rates.

In this post we present financial and credit cycles in the history: Due a weak credit cycle, Germany was a weak economy under many other weak ones.

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Two additional criteria important for Emerging Markets: High foreign debt, a weak net investment position and a current account deficit increases government bond yields.

The typical backstops of all improvements in business cycles are high oil prices and inflation. Inflation is mostly caused by local effects.

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The Bretton Woods time from 1945 to 1966 was a period of strong growth, especially in country like Germany, France, Italy and Japan.

Rational expectations led to a wage-price spiral in the United States, which was followed later by a similar phenomenon in Germany. In both cases credit and money expansion paved the way for spending sprees.

The next financial cycle takes from 1981 to 1990: The dollar was strong, Latin America lost a decade and the Japanese created their bubble.

A history of financial cycles: 1990-1996 the breakdown of communism leads to a boom in Germany and – due to high interest rates and inflation – to a breakdown of the European monetary system.

In this post we present financial and credit cycles in the history: Due a weak credit cycle, Germany was a weak economy under many other weak ones.

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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.

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

A critical Swiss Franc History: Between 1996 and 2004 Switzerland and its main trading partner and FX proxy Germany saw slower growth compared to other European countries. We explain the reasons

A critical Swiss franc history: This chapter describes the most controversial episode in the Swiss monetary history: How the Swiss National Bank helped to wreck the Swiss real estate market in the 1990s.

After the Volcker moment or sometimes called “Volcker shock”, commodity prices plunged, the gold price collapsed. Thanks to additional supply, e.g. from Northsea oil, a so-called oil glut appeared. After the increase of debt in the 1970s, some economies in Southern America collapsed. The major reason was Volcker’s tight monetary policy with high interest rates and the dependency on US funds.

We shows the massive appreciation of Swiss franc and German mark in the 1970s, the reasons were: stagflation and the wage-price spiral.

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We establish a long-term view and history of the Swiss franc. We compare the franc with gold.

On June 18th, 2014, the new radical libertarian party UP!, “Unabhängige Partei”, Independent Party was founded. The party is co-headed by the former head of the Swiss young liberals, Brenda Mäder, the former head of the young liberals St. Gallen Simon Scherrer and Silvan Amberg, the former leader of FDP’s homosexual association. The FDP is losing some of their brightest minds.

According to Swiss Statistics the inflation rate has risen to 0.2% y/y – as for both the Swiss CPI standard and the European HICP standard.

The ECB surprised with negative rates on excess reserves, on the deposit facility and even on TARGET2. We clarify whether the Bundesbank, as a member of the euro system, must pay negative interest rates on its huge TARGET2 surplus.

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In June 2014, the ECB decided to introduce negative rates on the excess reserves of banks. We explain that German banks had already removed most excess liquidity before the ECB meeting of June 2014, and they will continue to do so. Hence hardly any German bank will pay negative rates after the recent ECB decisions at that meeting.

In our view, the ECB measures of June 2014 want to increase German lending, spending, salaries and inflation. Finally they target a reduction of German competitiveness. The ECB wanted to talk down the euro but will not succeed. We explain why the measure are bullish for the euro. We expect EUR/USD of 1.40 in the …

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  The European Central Bank (ECB) has the habit of reacting late. As seen in July 2008 and July 2011, the ECB is often the last major central bank to hike rates. They hike rates at the moment when others prepare for a recession or a significant slowing. Currently we are witnessing the opposite movement: The world is getting …

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Pictet calls for negative interest rates in Switzerland in order to maintain rate differentials between the euro zone and Switzerland. Maintaining rate differentials would be useful for FX speculators and for money market funds that still invest in the euro zone.

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The tendency of the European parliament elections seems to be that in the Northern countries rather right-wing parties obtain more votes, like British UKIP, German AFD, Danish People’s Party, Austrian FPÖ or Sweden Democrats. In the austerity countries the left-wing movements are getting stronger and stronger, led by SYRIZA in Greece and Sinn Fein in …

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We name the main drivers of disinflation and the downwards manipulators of the CPI: Markets, central banks, investors, governments, statisticians, ageing, entrepreneurs, global competition, technology and last but least the euro. Despite that downwards-manipulation we realized that inflation is there, just not where you might live!

The most effective ways of measuring employment is by looking at the Labor Participation Rate. We compare the participation rates of the United States, Canada, the U.K., Germany and Italy.

Cleveland Fed: Price inflation is a monetary phenomenon. Hence, the money multiplier theory is still valid, just not in the US and in Europe.

The major reason for rising British and American home prices is for us the relatively new phenomenon that they are to able to finance at cheap rates. Swiss or Germans have seen relatively low mortgage rates for more than three decades (with a short exception in the mid 1990s after the German reunification). The main driver of low rates …

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A list of long-term sector balances and related provided by Nomura’s research institute and its chief economist Richard Koo.

Hans Werner Sinn has formulated his critique with Piketty. Sinn says that r ≠ i > g. Interest rate are usually higher than economic growth, but not necessarily increases of wealth.

We have published the extended version of “The Swiss Franc, Pseudo-Mathematics And Financial Charlatanism” on the investor site Seeking Alpha. The version is longer than the one published previously.

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The main task of a central bank occupied with QEE (quantitative easing or exchange intervention) is to obtain higher gains on seigniorage than it loses with its “ever appreciating” currency. Otherwise its equity capital would be absorbed. In the first quarter of 2014, the Swiss National Bank (SNB) was unable to accomplish this task.  

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There are different discussions ongoing if a central bank may monetize debt and act of a quasi-fiscal agent. One opinion was the Modern Monetary Theory that advocates monetizing debt.

The Indian central banker Rajan recently accused his Western colleagues of lax policy until 2007. Furthermore he argued that FX intervention using so-called “quantitative easing or exchange intervention” (QEE) help to dry up the needed money supply in India. We will look on his statement from this money supply angle: In some countries, the money …

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In some countries, the money multiplier is falling, in some others it is increasing, mostly due to central bank tightening. Does this justify to speak of secular stagnation?

The power distance between employer and employee enforces the importance of the leader, the entrepreneur. Moreover, the collectivite Asian society does not want unemployment, employees prefer to renounce to salary hikes in favor of the collective. These cultural reasons can qualify as drivers of the Japanese balance sheet recession.

Based on four different data sources, we prove  that Swiss the home price to income ratio is small in global comparison and in a historic perspective. Combined with another decade of near zero interest rates, reason enough to think that the Swiss real estate boom should continue for another decade.

A repo provides liquidity to banks while the reserve repos aims to reduce liquidity and reduce inflation. In 2011, the SNB used SNB bills and reverse repos to reduce inflationary pressure. SNB bills are short-term bonds that pay a certain interest.

  According to Swiss Statistics the yearly inflation rate is at 0.0%, and the monthly rate is +0.4%. The Spanish CPI is already under zero at -0.2%, and the Italian one is at +0.3%, not to speak about severe Cyprus or Greek deflation . Still in February 2012, the difference between the Swiss and Euro …

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Somebody who follows regularly the trade balance figures from Eurostat, may have noticed a sentence that was repeated in each monthly release from the Eurostat trade statistics in 2013: “The EU28 trade surplus increased significantly with Switzerland”. The reason was massive gold sales from the UK to Switzerland.

Update March 21, 2014: Total SNB sight deposits increased to 367.8 bln. CHF, but flows reverted a bit. Foreign banks and “non-banks” reduced their CHF exposure at the SNB to 50.8 bln, possibly converting a part of the difference into USD. Dollars are more useful when sanctions will hurt both Russian and German firms. On …

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In 2013, private investors from the UK sold net (!) 1464 tons of physical gold (and similar) for a value 44.3 billion EUR. This was 1 464 000 kilograms each at the current price of 30254€ per kilo

In the 2014 assessment for Switzerland by the International Monetary Fund several sentences caught our eyes; we will contrast them with our recent critique. The most important one was that for the IMF is only “moderately overvalued”, this would have no negative effect for exporters.

In the 2014 assessment for Switzerland by the International Monetary Fund, several sentences sparked in our eyes; we will contrast them with our recent critique.

The Swiss government see Swiss GDP growth at 2.2% in 2014 and 2.7% in 2015. Our estimate sees a divergence in the GDP components; we expects a lower trade surplus and higher spending. in both cases CHF should rise.

Der Propagandakrieg in Russland, in den USA und insbesondere in Deutschland und auch in der Schweiz geht weiter. Russische Medien trichtern den Menschen ein, dass eine riesige Flüchtlingswelle von Russen aus der Ukraine stattfindet. Deutsche Medien sind gleichgeschaltet: von links (TAZ, Spiegel, Stern) bis rechts (FAZ, n-tv.de und Welt) trichtern sie den Deutschen ein, dass …

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The Swiss National Bank (SNB) is reporting a loss of CHF 9.1 billion for the year 2013 (2012: profit of CHF 6.0 billion). Valuation losses on gold holdings amounting to some CHF 15.2 billion contrast with a profit of CHF 3.1 billion on foreign currency positions and a net result of CHF 3.4 billion from …

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The main task of a central bank occupied with QEE (quantitative easing or exchange intervention) is to obtain higher gains on seigniorage than it loses with its “ever appreciating” currency. Otherwise its equity capital would be absorbed.