Tag Archive: newsletter

Monthly Macro Monitor – October 2018

2018-10-24

by

2018-10-24

Economic Growth & Investment
Stocks have stumbled into October with the S&P 500 down about 6% as I write this. The source of equity investors’ angst is always hard to pinpoint and this is no exception but this correction doesn’t seem to be due to concerns about economic growth. At least not directly.

Read More »

Europe Challenged

2018-10-24

by

2018-10-24

Europe is in an untenable position. It is being challenged on many fronts. A weaker euro need not result, but it is the path of least resistance. The economy has lost its momentum. What was first written off as a soft patch, now looks a bit more serious.

Read More »

FX Daily, October 23: Stock Slump Pushes Yields Lower and Buoys Yen

2018-10-23

by

2018-10-23

There is one main story today, and that is the resumption of the slide in equities. It is having a ripple effect through the capital markets. Bond yields are tumbling. Gold is firm. The dollar is narrowly mixed, though the yen stands out with almost a 0.5% gain. Most of the large equity markets in Asia, including Japan, China, Hong Kong, Korea, and Taiwan were off mostly 2%-3%.

Read More »

Cool Video: Bloomberg Discussion of Late US Cycle

2018-10-23

by

2018-10-23

An assessment of the US economy is an important input into the expectations of the dollar's behavior in the foreign exchange market. As a currency strategist, my views of the US economy are often subsumed in discussions or talked about indirectly by talking about Fed policy.  However, in this clip with Alix Steel and David Westin, I have an opportunity to sketch outlook for the US economy.

Read More »

The Coming Inflation Threat

2018-10-23

by

2018-10-23

Inflation, consumer prices for US 1970-2010
Falling asset inflation plus rising cost inflation equals stagflation. Inflation is a funny thing: we feel it virtually every day, but we’re told it doesn’t exist—the official inflation rate is around 2.5% over the past few years, a little higher when energy prices are going up and a little lower when energy prices are going down.

Read More »

Useless But Not Worthless, Report 21 Oct 2018

2018-10-22

by

2018-10-22

Price of Franc vs Swiss M0
Let’s continue to look at the fiasco in the franc. We say “fiasco”, because anyone in Switzerland who is trying to save for retirement has been put on a treadmill, which is now running backwards at –¾ mph (yes, miles per hour in keeping with our treadmill analogy). Instead of being propelled forward towards their retirement goals by earning interest that compounds, they are losing principal.

Read More »

FX Daily, October 22: Collective Sigh of Relief?

2018-10-22

by

2018-10-22

After a slow start in Asia, the US dollar has turned better bid. The euro recovered from $1.1430 before the weekend to $1.1550 today, where an option for almost 525 mln euros expires today. There is another option (1.6 bln euros) at $1.1500 that also expires today.

Read More »

Swiss Banks Curb China Travel After UBS Banker Arrested

2018-10-22

by

2018-10-22

Asia HNW Population, 2010 - 2017
Two major Swiss banks imposed restrictions on staff travel to China after a UBS employee was detained in the country, underscoring the challenges of doing business in a country which is a mecca for banks eager to capture and manage (for a generous fee) the fastest growing fortunes in the world, yet are challenged by a regime that tramples over civil rights.

Read More »

FX Weekly Preview: What Can Bite You This Week?

2018-10-22

by

2018-10-22

Several major central banks will meet next week, including the European Central Bank, but it is only the Bank of Canada that is expected to hike rates. The flash PMIs and the first official estimate of Q3 US GDP are among the data highlights. Beyond the events and data, the volatility from global equity markets from Shanghai to New York will continue to have a strong influence on other capital markets.

Read More »

Mutiny, Class, Authority and Respect

2018-10-22

by

2018-10-22

Humiliation and fear of a catastrophic decline in status foment mutiny and rebellion. I recently finished The Bounty: The True Story of the Mutiny on the Bounty, a painstakingly researched history of the mutiny, but with a focus on how the story was shaped by influential families after the fact to save the life of one mutineer, Peter Haywood, and salvage the reputation of the leader, Fletcher Christian, via a carefully orchestrated character...

Read More »

Swiss Rail plans to test free WiFi on trains

2018-10-21

by

2018-10-21

Swiss Rail announced on Thursday that it would test free WiFi, named FreeSurf, on certain routes next year with a plan to extend the offer to all major routes from 2020, according to RTS. Train passengers benefiting from the tests in 2019 will be those travelling on InterCity trains between Lausanne and St. Gallen, Geneva and Zurich, and Bienne and Basel.

Read More »

Switzerland Retains Top Spot in Global Wealth Ranking

2018-10-21

by

2018-10-21

Despite a slight decline in fortunes, the Swiss still enjoy the highest mean wealth per adult, according to the 2018 Credit Suisse Global Wealth Report. The reportexternal link, released on Thursday, estimated the average fortune of a Swiss adult to be $530,240 (CHF527,707) compared to $537,600 the previous year. The Alpine nation still comes out on top, followed by Australia ($411,060) and the United States ($403,970).

Read More »

Is the Greatest Bull Market Ever Finally Ending? (Hint: Follow the Money)

2018-10-21

by

2018-10-21

Global wealth CSa
The key here is the gains generated by owning US-denominated assets as the USD appreciates. Is the Greatest Bull Market Ever finally ending? One straightforward approach to is to follow the money, i.e. global capital flows: assets that attract positive global capital flows will continue rising if demand for the assets exceeds supply, and assets that are being liquidated as capital flees the asset class (i.e. negative capital flows) will decline in...

Read More »

Steep Increase in Swiss Housing Prices in Last Decade

2018-10-20

by

2018-10-20

Apartment prices have risen in every district in Switzerland in the last eleven years except for one. Zurich tops the list with a median price of CHF 13,000 ($1313) per square metre – a 97% increase since 2007. This is according to a study by the Zurich Federal Institute of Technology (ETHZ) in partnership with comparison website comparis.ch.

Read More »

Swiss arms exports rose almost 18percent in 2018

2018-10-20

by

2018-10-20

Switzerland exported close to 18% more arms over the first nine months of 2018 than it did in the first nine months of 2017, according to figures published by State Secretariat for Economic Affairs (SECO). According to the numbers, in the nine months to 30 September 2018, Swiss companies exported close to CHF 300 million of arms, nearly CHF 45 million or 17.6% more than over the same period in 2017.

Read More »

Raining On Chinese Prices

2018-10-20

by

2018-10-20

China Price Stability 2007-2018
It was for a time a somewhat curious dilemma. When it rains it pours, they always say, and for China toward the end of 2015 it was a real cloudburst. The Chinese economy was slowing, dangerous deflation developing around an economy captured by an unseen anchor intent on causing havoc and destruction. At the same time, consumer prices were jumping where they could do the most harm.

Read More »

Bumpy Road Ahead for Italian Budget

2018-10-19

by

2018-10-19

Italy Update Chart, 2006 - 2022
Rome’s budget plans put it on a collision course with the European Commission. The Italian government has submitted its 2019 draft budget plan (DBP) to the European Commission. The proposed DBP is not in line with European Union rules and sets the government on a collision course with the European authorities.

Read More »

Global economic competitiveness stumbles in face of technology transformation

2018-10-19

by

2018-10-19

A major update to the World Economic Forum’s annual Global Competitiveness Index reveals that the global economy is ill-prepared for the transformation brought on by technology disruption. While the United States comes the closest to the “competitive frontier” taking the top spot in the ranking, the WEF warns that government policies need to catch up to prevent rapid technological change from becoming a drag on competitiveness.

Read More »

Interview, Ted Talk, Gold Bug Hope and will the Swiss Franc Collapse

2018-10-19

by

2018-10-19

I was on the Jay Taylor Show again, to talk about the the Swiss franc. No, the headline was not of my choosing. Adam Caroll gave a Ted Talk about how people behave differently when money isn’t real. And gets into a discussion of how kids will click to spend on their parents’ phones without any real appreciation for what it costs. It’s called “When money isn’t real“.

Read More »

Inflation Environment remains Benign in China

2018-10-19

by

2018-10-19

China CPI and Core CPI YoY, 2013 - 2018
The headline consumer price index (CPI) in China picked up slightly in September, rising by 2.5% year-over-year (y-o-y) compared with 2.3% in August, driven by higher food price and fuel prices. Excluding food and energy, core inflation in China actually eased to 1.7% y-o-y in September from 2.0% in August.

Read More »