Category Archive: 1.) CHF
Swiss GDP and Swiss Franc Shock Propaganda
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.
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Global Stocks Soar On Stimulus Hopes After Miserable Chinese, Japanese Data; Short Squeeze
Bad news is once again good news... for stocks that is.
After a month and a half of markets unable to decide if they should buy or sell on ugly data, over the weekend, People’s Bank of China Governor Zhou Xiaochuan expressed faith in the economy, ...
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Weak CHF during the Fat Years of the Joseph Cycle
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...
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Switzerland Was Right to Scrap Its Franc Cap, Economists Say
The Swiss National Bank’s surprise decision a year ago to remove its ceiling on the franc was justified, according to the vast majority of economists in Bloomberg’s monthly survey. The SNB abandoned the cap on Jan. 15 of last year, saying interventions to sustain it would have been out of proportion to its economic advantages. With the benefit of 12 months of hindsight, all but two of 23 economists answered that the move was indeed right.
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Square Holes And Currency Pegs
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
When David Bowie died, everybody, in what they wrote and said, seemed to feel they owned him, and owned his death, even if they hadn’t thought about him, or listened to him, for years....
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Economic Forecasts for 2015: Swiss Banks were too Optimistic
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.
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Will The Franc Follow In The Euro’s Footsteps?
The SNB's expected December 10 rate cuts have already been priced in to the Swiss Franc.
The central bank's failure to do more than the market expected resulted in a stronger CHF.
Growing uncertainty over the Fed's 2016 monetary policy is a bullish factor for the franc.
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Dollar Recoups January Loss Against the Swiss Franc
The US dollar recorded its high for the year against the Swiss franc on January 14 near CHF1.0240. It closed that day a little below CHF1.0190. The next day the Swiss National Bank surprised the world by lifting its cap against the euro. The ...
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Julius Bär’s Acket Talking Nonsense: Too Much Transparency on SNB Sight Deposits?
Julius Baer's Chief Economist Janwillem Acket argues that by publishing weekly sight deposits, the SNB is telling the market too much. George Dorgan responds that this hiding of economic data will need to happen also in trade data, in GDP data and even in the disclosure of Swiss company results. For Adam Button, this contradicts the people's desire of transparency.
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Impressive Swiss Recovery After SNB Peg Removal
Retail data shows that the SNB peg removal in January 2015 as early as April 2015 with minimal adverse impact on the economy.
Trade surplus showed that Switzerland had fully recovered its lost trade surplus in May and expectations crossed an important threshold into positive territory in June.
CHF strengthened since May end, as the market caught wind of the Swiss recovery, and the Grexit would further strengthen the CHF if it were to occur.
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Q1/2015: Swiss Real GDP Rises by 15 percent … in Euro Terms
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...
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The two phases of CHF appreciation… and what is in between
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...
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Swiss Franc History: The Gold Standard and Bretton Woods
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.
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Ex-Post FX Evaluation: Is the Swiss Capital Account Able to Neutralise the Persistent Current Account Surpluses?
(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...
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