Tag Archive: newsletter

FX Daily, August 30: US Dollar Finishing August on Firm Note as Euro nears Two-Year Lows

2019-08-30

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2019-08-30

Global equities are advancing at least in part on ideas that trade tensions are easing. China announced it would not take immediate action on the five percentage point increase in levies that the US announced strictly in response to China's retaliatory tariffs. A lull between blows is not the same thing as de-escalation or truce.

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Monthly Macro Monitor: Market Indicators Review

2019-08-30

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2019-08-30

US 10 Year Treasury Yield Index, Sep 2017 - Aug 2019
The Treasury market continues to price in lower nominal and real growth. The stress, the urgency, I see in some of these markets is certainly concerning and consistent with what we have seen in the past at the onset of recession. The move in Treasuries is by some measures, as extreme as the fall of 2008 when we were in a full blown panic.

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Swiss Trade with Much of South America should Soon be Tarif Free

2019-08-30

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2019-08-30

A deal agreed between EFTA and the South American Mercosur bloc, which includes Argentina, Brazil, Uruguay and Paraguay, with a combined population of 260 million, is close to signing. EFTA includes Iceland, Liechtenstein, Norway, and Switzerland. Under the deal, 95% of Switzerland’s CHF 3.6 million annual exports to the bloc would be tarif free.

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The Fantasy of Central Bank “Growth” Is Finally Imploding

2019-08-30

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2019-08-30

TCMDO, 1950 - 2019
It was such a wonderful fantasy: just give a handful of bankers, financiers and corporations trillions of dollars at near-zero rates of interest, and this flood of credit and cash into the apex of the wealth-power pyramid would magically generate a new round of investments in productivity-improving infrastructure and equipment, which would trickle down to the masses in the form of higher wages, enabling the masses to borrow and spend more on...

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FX Daily, August 29: Johnson Faces Legal Challenges and Conte may be Given an Extension

2019-08-29

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2019-08-29

The capital markets are calm today, though there does seem to be some optimism creeping back into the market. The Chinese yuan strengthened, snapping a ten-day slide and Italian bank shares index has risen by more than 1% for the fourth consecutive session.

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SNB’s Maechler: Reaffirms Pledges on FX and Intervention, Negative Rates

2019-08-29

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2019-08-29

SNB Maechler
SNB jawboning CHF lower as concerns mount over global growth fears and a flight to safety. EUR/CHF is already trading close to the lows of the year. The Swiss National Bank's Andréa M Maechler, Member of the Governing Board, has crossed the wires saying that ‘any intervention’ requires an analysis of cost/benefits - plenty of jawboning going on here.

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More SNB Maechler: Right now we still have plenty of room for forex intervention

2019-08-29

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2019-08-29

EUR/CHF, Daily - Jan 2017 - August 2019
Right now is still plenty of room for forex intervention. As to negative rates are working, SNB's Maechler says "absolutely". Looking at the EURCHF, the pair is trading near the lowest levels since June 2017. The lows this month tested the lows from back then. The test has stalled the fall.

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Meat in Switzerland costs 2.3 times the EU average

2019-08-29

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2019-08-29

You might think twice before overcooking a load of steak, chops and sausages on the barbecue: meat costs 2.3 times more in Switzerland than the European Union average. The priciest EU country for meat, Austria, is 1.46 times the average.

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Japan: Fall Like Germany, Or Give Hope To The Rest of the World?

2019-08-29

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2019-08-29

Japan JGB, Jan 2014 - Jul 2019
After trading overnight in Asia, Japan’s government bond market is within a hair’s breadth of setting new record lows. The 10-year JGB is within a basis point and a fraction of one while the 5-year JGB has only 2 bps to reach. It otherwise seems at odds with the mainstream narrative at least where Japan’s economy is concerned.

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USD/CHF technical analysis: Manages to hold above 0.9800 handle, 200-hour SMA

2019-08-28

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2019-08-28

USD/CHF 1-hourly chart
The USD/CHF pair struggled to sustain above 61.8% Fibo. level of the 0.9879-0.9714 recent slump and seems to have stalled this week's recovery move from the 0.9700 neighbourhood. The intraday downtick remained cushioned near the 0.9800 handle, which coincides with 100/200-hour SMA confluence region and should act as a key pivotal point for intraday traders.

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FX Daily, August 28: Optimism about Italy Creeps Back in but Sterling Heads the Opposite Way on Brexit Realities

2019-08-28

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2019-08-28

The capital markets have turned quiet. There have been no more headline bombs about trade, and China set the dollar's reference rate much lower than projected. Asia Pacific equities were mixed. Hong Kong, China, India, and Singapore were on the downside, while Taiwan, Korea, and Australia rose.

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Cryptos/Switzerland: Mountain Pass

2019-08-28

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2019-08-28

Facebook takes on global finance. But its proposed digital currency Libra frightens central banks and regulators. Below the radar, Switzerland launches its own skirmish. Two local crypto-finance pioneers this week became the first to win banking licences.

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Swiss Banks Slow on the Digital Uptake

2019-08-28

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2019-08-28

Swiss banks are turning their attention to providing more digital services for customers, but their progress has been slow. This may have something to do with new technology upstarts struggling to gain significant traction thus far in Switzerland, according to a new study.

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Emerging Markets: FX Model for Q3 2019

2019-08-28

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2019-08-28

Emerging Markets FX Q3 2019
The broad-based dollar rally remains intact despite the market’s overly dovish take on the Fed. We still believe markets are vastly overestimating the Fed’s capacity to ease in 2019 and 2020. What’s clear is that the liquidity story is not enough to sustain EM. MSCI EM FX is on track to test the September 2018 low near 1575 and then the April 2017 low near 1568.

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Definitely A Downturn, But What’s Its Rate of Change?

2019-08-28

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2019-08-28

US Durable Goods Chicago Fed NAI, Jan 2006 - 2019
The Chicago Fed’s National Activity Index (NAI) fell to -0.36 in July. That’s down from a +0.10 in June. By itself, the change from positive to negative tells us very little, as does the absolute level below zero. What’s interesting to note about this one measure is the average but more so its rate of change.

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Bitcoin-Friendly Banks

2019-08-27

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2019-08-27

Over its 10 years of existence, Bitcoin adoption has been just like its price—up and down. At this point in time, it’s safe to say that the adoption of our favourite cryptocurrency has never been higher. Since adoption is so high, it has never been easier to buy bitcoin (with hundreds of payment methods available on peer-to-peer marketplaces).

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FX Daily, August 27: Realism Fights Back After Hope Dominated Yesterday

2019-08-27

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2019-08-27

Hope triumphed over realism yesterday, and realism is fighting back toward. Asia Pacific markets, however, traded on the echo from the recovery in North America on Monday. The MSCI Asia Pacific recouped part of yesterday's drop, led by Chinese markets. Hong Kong was the main exception.

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Dollar Firm as Markets Calm

2019-08-27

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2019-08-27

Dollar Firm as Markets Calm
Market sentiment has improved after President Trump said China has asked to restart trade talks. PBOC fixed the yuan basically flat and firmer than what models suggested. The G-7 summit wraps up today with little to show for it. We believe the Chicago Fed National Activity Index remains the best indicator to gauge US recession risks. Germany July IFO business climate came in weaker than expected

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Switzerland’s First Crypto Banks Receive Licences

2019-08-27

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2019-08-27

The Swiss financial regulator has awarded banking and securities dealer licences to two new “crypto banks”. SEBA and Sygnum have been cleared to operate in the new world of tokenised digital securities, a major milestone for the fledging industry.

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Directive 10-289, Report 25 Aug

2019-08-26

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2019-08-26

Gold and Silver Prices
Everyone must ask himself the question. Do you want the world to move to an honest money system, or do you just want gold to go up (we italicize discussion of apparent moves in gold, because it’s the dollar that’s moving down—not gold going up—but we sometimes frame it in mainstream terms).

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