Category Archive: 4.) Marc to Market

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FX Daily, June 15: Key Data and FOMC

2016-06-15

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2016-06-15

The Swiss Franc was today on the back-foot against the euro, while the FOMC helped him to rise against the dollar. Yesterday Swiss producer prices were published. Negative changes in producer prices in 2015 reduce the Swiss franc overvaluation in terms of the Real Effective Exchange strongly. Now, however, changes producer prices are approaching zero again.

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Fed Softens Stance Slightly

2016-06-15

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2016-06-15

The immediate reaction was driven by the Fed's dot plots.ย  Although the median continues to expect two hikes this year, six officials now see only one hike.ย  Only one official anticipated one hike this year in the last forecasts made in March.ย  The m...

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Kuroda and the BOJ

2016-06-15

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2016-06-15

Following today's FOMC meeting, the central banks of Japan, Switzerland, and the UK meet tomorrow.ย  The SNB will keep its powder dry to be able to respond to the results of the UK referendum if needed.ย  The Bank of England is als...

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FX Daily, June 14: Capital Markets Remain at UK Referendum’s Mercy

2016-06-14

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2016-06-14

"The Swiss Franc was the strongest performer, EUR/CHF has fallen to 1.08 by 0.8%". A spate of opinion polls showing a tilt toward Brexit, and the leading UK newspaper urging the Leave vote on the front page, keep the global capital markets on edge. Equities are lower, though of note ahead of the MSCI decision first thing Wednesday in Asia, Chinese shares eked out a small gain.

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Great Graphic: Oil Flirts with Four-Month Uptrend

2016-06-14

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2016-06-14

The broader technical tone has weakened.ย  The RSI has turned lower.ย  The MACDs are also turning lower with a bearish divergence.ย  The five-day moving average may move below the 20-day moving average for the first time since mid-April later this week....

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US Election Infographic

2016-06-13

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2016-06-13

This infographic was in the Wall Street Journal on the US election.ย  It is important to remember that the US does not elect the President by direct popular vote.ย  This makes the national polls a bit misleading. There are 538 electoral college votes.ย  To be elected a candidate must secure a majority or 270ย  electoral … Continue reading...

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FX Daily, June 13: Brexit Dominates

2016-06-13

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2016-06-13

  Swiss Franc Chandler is a bit puzzled about the Swiss Franc, that got stronger despite speculators being short CHF. We see weaker oil prices and weaker China as major reason, why sight deposits are falling and speculators are long the dollar. FX Rates The risk that the UK votes to leave the EU next … Continue reading »

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Democratic Deficit: Is the UK Referendum the Tip of the Iceberg?

2016-06-13

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2016-06-13

One of the most profound criticisms of the EU that it remains, even at this late date, primarily an elite project.ย  The democratic deficit has grown, according to the latest Pew Research multi-country poll. The Pew Research sur...

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FX Weekly Preview: Four Central Bank Meetings and More

2016-06-12

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2016-06-12

A couple of weeks ago, the four central banks that meet in the coming days were thought to be a big deal.ย ย Numerous Federal Reserve officials were preparing the market for a summer hike. Risks of a new downturn in Japan spurred spe...

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FX Weekly Review: June 06 – June 10: EUR/CHF Down 2 percent

2016-06-12

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2016-06-12

Two main events that will drive the foreign exchange market. The first is the FOMC meeting. The shockingly weak job growth dashed whatever lingering odds of a move next week. The EUR/CHF has fallen by 2%.

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Weekly Speculative Positions after Uneventful ECB and Surprisingly Weak US Jobs

2016-06-11

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2016-06-11

Price action shows a increase of the Swiss franc after the bad US payrolls report. Commitments of traders, however, indicate a move to a short CHF position of 9600 x 100k contracts against the dollar. We must separate speculative CHF positions from inflows into CHF cash, CHF stocks, bonds and real-estate, what we call "real financial flows". These will be revealed on Monday, with the SNB release of sight deposits, the counter-position of real...

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FX Daily, June 10: Yen and Swiss Franc maybe Drawing Support from Brexit Fears

2016-06-10

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2016-06-10

20160610 Movers and Shakers FX Market
Once again, CHF was one of the strongest performers on the FX market. Next Monday we will report how much the Swiss National Bank had to intervene in our regular "Weekly SNB sight deposits" report. For the week, it is the dollar-bloc and franc that have maintained weekly gains. The US dollar weakened in the first half of the week as participants continued to react to the shockingly poor jobs report and shift in Fed...

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Politics and Economics

2016-06-10

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2016-06-10

Many people understand politics and economics to be two different disciplines.ย I remember in graduate school more than two decades ago, many colleagues and professors operationally defined political economy as how politics, by which they meant the state, screws up economics. I spoke at the Fixed Income Leaders Summitย earlier this week and teased that many seemed …

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FX Daily, June 9: Greenback is Mostly Firmer, but Yen is Firmer Still

2016-06-10

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2016-06-10

The euro continues to weaken against the franc at 1.0922. But the speed of the descent has slowed. The dollar is stronger, in particular against EUR, CHF and AUD. The US dollar is posting modest upticks against most of the European currencies and the Canadian and Australian dollars.ย However, it has fallen against the yen and taken out the recent low, leaving little between it and the May 3 l...

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FX Daily, June 8: Currencies Broadly Stable, but Greenback is Vulnerable

2016-06-09

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2016-06-09

Once again the Swiss Franc appreciates both against EUR and USD. The euro topped at 1.1095 shortly before the US payroll data and has fallen to 1.0932. The dollar has fallen from 0.9947 to 0.9596. The foreign exchange market is quiet.ย ย The euro remains confined to the narrow range seen on Monday between $1.1325 and $1.1395. ย We continue to look for higher levels near-term as the drop from May 3 (~$1.1615) to May 30 (just be...

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Cool Video: Bloomberg Television–All about the Periphery

2016-06-09

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2016-06-09

I am in Boston to attend the Fixed Income Leaders Summit and was invited to join Alix Steel, Joe Weisenthal, and Scarlet Fu on Bloomberg TV. ย  We talked about the peripheral in Europe, especially Portugal, Italy and Spain. Each has a pressing issue. ย In Portugal, yields have not fallen as much as in other … Continue reading »

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Presidential Elections and Fed Policy: How Close is Close?

2016-06-09

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2016-06-09

The most important element in next week’s FOMC meeting may come from the dot plot and whether Fed officials back away from the two hikes thought appropriate in March. When looking the schedule of FOMC meetings, and understanding that when the Fed says “gradual” to describe the normalization process, it does not mean hiking at …

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Great Graphic: Despite Higher Oil Prices, Middle East Pegs Remain Under Pressure

2016-06-08

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2016-06-08

With today’s gains, the price of Brent has nearly doubled from its lows in January.ย Of course, the price of oil is still less than half of levels that prevailed two years ago. ย At the same time, many leveraged investors cast a jaundiced eye toward currency pegs. ย Many have concluded that the Middle East currency pegs …

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Swiss Reserves: Not what They Seem

2016-06-08

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2016-06-08

SNB Currency Allocation 2016
This posts shows again the stupidity of the financial media, that mixes up assets and liabilities for central banks. SNB FX reserves are assets. They are in different foreign currencies and subject to the valuation effect of these currencies.

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FX Daily, June7: Another Breakdown of EUR/CHF

2016-06-07

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2016-06-07

Once again both EUR and USD broke down against the franc. The adverse effect of the Friday US jobs reports is visible again. Moreover, CHF appreciated with the Asian block, with AUD and NZD and with the oil price.

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