Category Archive: 1) SNB and CHF

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Swiss Franc Trade-Weighted Index, Performance Far Worse than Dollar Index

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.

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SNB intervenes for 6.3 billion francs in one week, total 10bn Brexit intervention

2016-07-05

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2016-07-05

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.

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Swiss Bond Yields all Negative up to 30 years: Greatest Bubble in Financial History

2016-07-02

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2016-07-02

yield curve Switzerland
Graham Summers says that central banks have lost control and investors are crazy. They pay the Swiss government for the right to own their bonds. One point is missing: Swiss rates are "more negative than others", because investors expect a slow appreciation of the Swiss franc.

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Swiss Balance of Payments and International Investment Position 2015

2016-06-29

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2016-06-29

Swiss National Bank
The Swiss National Bank (SNB) is publishing the annual Swiss Balance of Payments and International Investment Position report today. This year, the report is being released earlier – in May instead of August, as in previous years. It is based on the dataset for the fourth quarter of 2015, which was released with the press release of 21 March 2016 headed ‘Swiss balance of payments and international investment position, Q4 2015 and review of the year...

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El-Erian: Cash is more valuable than ever

2016-06-26

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2016-06-26

Mohamed El-Erian, chief economic adviser at Allianz Global Investors. says that Investors shouldn’t underestimate the role of cash in their portfolios We should add that the Swiss Franc is one of the most important havens for holding cash.

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Purchasing Power Parity, REER: Swiss Franc Overvalued?

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...

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In Surprising Development NIRP Starts To Work, Pushing Rich Swiss Savers Out Of Cash Into Stocks

2016-06-23

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2016-06-23

One of the rising laments against NIRP is that far from forcing savers to shift from cash and buy risky (or less risky) assets, it has done the opposite. Intuitively this makes sense: savers expecting a return on the cash they have saved over the years are forced to save even more in a world of ZIRP or NIRP, as instead of living off the interest, they have to build up even more prinicpal.

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As Of This Moment, Barclays Is Not Accepting FX Stop Loss Orders

2016-06-23

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2016-06-23

Anyone wondering why gaps and volatility in FX, and especially cable is reaching on the absured today, with 100 pips swings in minutes the norm, the reason is that there is virtually no liquidity.

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Swiss balance of payments and international investment position: Q1 2016

2016-06-21

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2016-06-21

Switzerland International Investment Position - Overview
The current account surplus amounted to CHF 10 billion in the first quarter of 2016, CHF3 billion less than in the year-back quarter. The decline was primarily attributable to trade in goods, where the receipts surplus of CHF 8 billion was CHF 2 billion lower than in the first quarter of 2015. The receipts surplus for services remained stable at CHF 5 billion. In the case of primary income (labour and investment income), receipts and expenses were...

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SNB’s Maechler on Negative Rates and our Critique

At the SNB news conference, Andréa Maechler discusses the current situation of financial markets and the negative interest environment. For us, negative rates make only holding money on accounts less attractive but not cash, real estate or stocks. Negative rates reduce the profit of banks and therewith GDP.

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News conference Swiss National Bank 2016, Fritz Zurbrügg

Fritz Zurbrugg
UBS and Credit Suisse: Capital Situation improved further: fully compliant. Domestically focused banks have capitalisation well above regulatory minimum requirements, but mortgage lending and risk exposure increased in 2015. In case of an interest rate shock, this could lead to problems.

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News conference Swiss National Bank, Thomas Jordan

SNB rate remains –0.75%, SNB is ready to intervene in the FX market, Inflation will rise faster over the coming quarters, Swiss economy to grow 1% to 1.5% in 2016

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Monetary policy assessment of 16 June 2016

2016-06-16

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2016-06-16

conditional inflation forecast of june 2016
The Swiss National Bank (SNB) is maintaining its expansionary monetary policy. Interest on sight deposits at the SNB is to remain at –0.75% and the target range for the three-month Libor is unchanged at between –1.25% and –0.25%. At the same time, the SNB will remain active in the foreign exchange market, as neces sary. The negative interest rate and the SNB’s willingness to intervene in the foreign exchange market are intended to make Swiss franc...

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With Daily Record Lows: Chart of German Bund Yields Since 1977

2016-06-10

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2016-06-10

The German Bund chart is very important for us, because the Swiss franc is negatively correlated to German government bond yields. The lower Bund yields, the stronger the Swiss Franc. When European governments and the ECB are ready to pay higher interest rates, then CHF depreciates.

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Need Safe havens: CHF or Gold?

2016-06-09

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2016-06-09

In times of negative interest rates and falling earnings per share, gold is the ultimate safe haven. Due to negative rates, it is not the Swiss Franc.

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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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Apple Jumps After Berkshire Reveals 9.8 Million Share Stake

2016-05-17

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2016-05-17

After three consecutive weeks of seemingly relentless bad news for Apple, moments ago the stock jumped by $2 dollars, rising from $90.5 to over $92.50. Some hope for the Swiss National Bank or will Berkshire shares sink together with Apple and the SNB?

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As Carl Icahn Was Selling Apple, This Central Bank Was Furiously Buying

2016-05-14

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2016-05-14

We hope for the sake of Swiss residents that equity markets never suffer a dramatic drop. The SNB has “invested” 20% of Swiss GDP in stocks. When will the ivory tower economists ultimately lose control of the most manipulated, centrally-planned market in history?

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The Twilight Of The Gods (aka Central Bankers)

2016-05-10

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2016-05-10

The current financial market volatility increasingly reflects loss of faith in policy makers. Celebrity central bankers are learning that they must constantly produce new miracles for their followers.

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SNB Increased Equities Share to 20 percent, A High Risk Game for a Conservative Investor

2016-05-08

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2016-05-08

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.

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