Tag Archive: Monetary Policy
Bank Of America Reveals “The Next Big Trade”
Markets have stopped focusing on what central banks are doing and are "positioning for what they believe central banks may or may not do," according to BofA's Athanasios Vamvakidis as he tells FX traders to "prepare to fight the central banks," as th...
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The SNB and the Forex Rigging Irony
While Forex banks, traders, and other institutions are being blamed for market rigging, the Swiss National Bank can publish reports about its own market rigging, but instead of being a scandal, it's economic data. That's because the vast majority do...
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Swiss National Bank Admits It Spent $470 Billion On Currency Manipulation Since 2010
By now it is common knowledge that when it comes to massive, taxpayer-backed hedge funds, few are quite as big as the Swiss National Bank, whose roughly $100 billion in equity holdings have been extensively profiled on these pages, including its woef...
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Another Fed “Policy Error”? Dollar And Yields Tumble, Stocks Slide, Gold Jumps
Yesterday when summarizing the Fed's action we said that in its latest dovish announcement which has sent the USD to a five month low, the Fed clearly sided with China which desperately wants a weaker dollar to which it is pegged (reflected promptly ...
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Central Banks Shiny New Tool: Cash-Escape-Inhibitors
Submitted by JP Koning via Moneyness blog,
Negative interests rates are the shiny new thing that everyone wants to talk about. I hate to ruin a good plot line, but they're actually kind of boring; just conventional monetary policy except in negative ...
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HSBC Looks At “Life Below Zero,” Says “Helicopter Money” May Be The Only Savior
In many ways, 2016 has been the year that the world woke up to how far down Krugman’s rabbit hole (trademark) DM central bankers have plunged in a largely futile effort to resuscitate global growth.
For whatever reason, Haruhiko Kuroda’s move into NI...
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Are Central Banks Setting Each Other Up?
Authored by Mark St.Cyr,
There are times you try to connect the dots. There are others where those connections warrant adorning your trusted tin-foiled cap of choice; for you just can’t get there unless you do. This I believe is one of those time...
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The Chinese Yuan Countdown Is On
Submitted by SaxoBank's Dembik Christopher via TradingFloor.com,
Currency stability is a prerequisite for China's economic transition
Defending the yuan is prohibitively expensive – China cannot beat the market
Progressive devaluation managed by PBoC...
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“Time To Panic”? Nigeria Begs World Bank For Massive Loan As Dollar Reserves Dry Up
Having urged "don't panic" just 4 short months ago, it appears Nigeria just did just that as the global dollar short squeeze forces the eight-month-old government of President Muhammadu Buhari to beg The World Bank and African Development Bank for $3...
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BoJ Adopts Negative Interest Rates, Fails To Increase QE
Well that did not last long. After initial exuberance over The BoJ's wishy-washy decision to adopt a 3-tiered rate policy including NIRP, markets have realized that without further asset purchases (which were maintained at the current pace), there is...
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The Bull Market in Stocks May Be Done
The great stock bull market is, perhaps, done. To most people, a bull market is good, and its end is bad. After all, a rising market signifies a healthy economy. Investors are making money. Share prices are connected to business productivity, aren’t they?
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Nigerian Currency Collapses After Central Bank Halts Dollar Sales To Stall “Hyperinflation Monster”
Having told banks and investors "don't panic" in September, amid spiking interbank lending rates and surging default/devaluation risks, it appears the massive shortage of dollars that we warned about in December has washed tsunami-like ashore in oil-...
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Falling Yields, Rising Asset Prices -Rising Yields,Falling Prices
Our paper currency causes falling productivity, though not in terms of bushels per acre. What falls is productivity per dollar or euro of savings. This is the real meaning of the falling interest rate. When the rate was 10 percent, $1,000 of principal produced $100 of return. When it falls to two percent, then the same capital generates a return of only $20. Now with the Swiss 10-year bond, CHF 1,000 earns only CHF 1.3. Keith Weiner argues that one...
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Rising Sight Deposits at SNB Means Rising SNB Debt
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...
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Swiss National Bank Monetary Policy Mandate – 2007 version vs. today
The mandate of the Swiss National Bank is concentrated on price stability, i.e. less than 2% inflation and to avoid deflation.
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SNB Monetary Assessment June 2013: Very risk-averse, nearly hawkish tone
The Swiss National Bank (SNB) delivered a, for her standards, very hawkish monetary assessment with the focus on the risks in the financial sector. This does not come as a surprise for us. Each time, after the United States has recovered from a crisis – just like now – inflation and risks increased in Switzerland. …
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Balance of Payments Crisis: Did the Fed Cause the Euro Crisis with Excessive Monetary Easing?
The Fed's excessive monetary easing QE2 caused an inflationary period, that created a balance of payments crisis during which the Eurozone members were obliged to introduce excessive austerity measures.
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SNB Monetary Assessment March 2013
In its monetary assessment the SNB maintains the EUR/CHF floor and warned against further risks in the euro zone. The SNB has downgraded the inflation path to -0.2% (previously-0.1%) in 2013 and +0.2% (+0.4%) in 2014.We do not completely agree.
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