Tag Archive: newsletter

Powell plays the ‘insurance’ card again

2019-09-19

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2019-09-19

The Market Continues to Distrust the FED Dot Plot, Which Shows no Additional cut, 2018-2021
In spite of internal divisions, the Fed may go for a third rate cut in October and step in to alleviate pressure in repo market.The Federal Reserve (Fed) cut rates by 0.25% on Wednesday, as widely anticipated. The new fed funds target range is 1.75%-2.00%. The interest rate on banks’ excess reserves was cut by 0.30% to 1.80%.

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SNB leaves policy rate unchanged at -0.75 percent

2019-09-19

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2019-09-19

SNB announces its latest monetary policy decision - 19 September 2019. Sight deposits rate unchanged at -0.75%Willing to intervene and will remain active in FX market as necessaryExpansionary monetary policy continues to be necessary.

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Monetary policy assessment of 19 September 2019

2019-09-19

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2019-09-19

SNB Switzerland Conditional Inflation Forecast, September 2019
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Another Swiss bank delves into cryptoassets

2019-09-19

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2019-09-19

Arab Bank Switzerland has teamed up with blockchain technology firm Taurus to offer its wealthy clients access to bitcoin and ethereum. The bank joins a growing list of established players joining forces with fintech firms to tap into cryptoassets.

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Markets That Live by the Fed, Die by the Fed

2019-09-19

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2019-09-19

S&P 500, 2000-2015
The "everything bubble" is not permanent. All eyes are again on the Federal Reserve, as everyone understands that the Fed is the market-- the stock market, the bond market, the art market, the housing market, etc. All markets have been driven higher by one force: central bank money creation and distribution to the financial sector of financiers and corporations, the richest of the rich.

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FX Daily, September 18: FOMC Meets Amid Money Market Pressures

2019-09-18

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2019-09-18

Overview:  News that Saudi Arabia was able to restore 40%-50% of the oil capacity lost by the weekend strike coupled with the Fed's efforts to offset the squeeze in the money markets are allowing the global capital markets to trade quietly ahead of the conclusion of the FOMC meeting.  Equities are little changed with a lower bias that has been seen in the first few sessions this week.

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Schweizerische Nationalbank – Weshalb die SNB ihre Munition nicht verpulvern wird

2019-09-18

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2019-09-18

Noch vor wenigen Wochen galt es am Markt bereits mehrheitlich als ausgemacht, dass die Schweizerische Nationalbank am Donnerstag den Leitzins von minus 0,75 Prozent auf minus 1 Prozent weiter absenken wird. Ich konnte die Marktmeinung nie nachvollziehen. Der Wind hat nun tatsächlich gedreht. Eine weitere Absenkung der Zinsen scheint nun so gut wie ausgeschlossen.

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Central Bank Gold Buying Is “Sustainable and Indeed May Accelerate”

2019-09-18

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2019-09-18

Why central banks including China and Russia will keep buying gold due to concerns about the outlook for currencies, including the dollar and the euro, Mark O’Byrne, Research Director of GoldCore told Marketwatch. While the gold tonnage demand from central banks in recent months has been significant and near records, gold remains a tiny fraction of most central banks’ massive foreign-exchange reserves,” O’Byrne says, adding that the trend is...

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Some Thoughts on the Fed and Oil Shocks

2019-09-18

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2019-09-18

U.S. GDP Growth, Q1 1973-Q1 1982
Oil prices have spiked after the weekend attack on Saudi oil facilities.  Will it impact the Fed tomorrow?  No.  We compare the current (but still unfolding) situation to past oil shocks from the 1970s and discuss the policy responses taken.  

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Focus Is On The Pre-recession Condition

2019-09-18

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2019-09-18

Industrial Production, SA 2016-2019
Before the Great “Recession” ended the business cycle as we once knew it, there was a widely accepted concept known as stall speed. In the US, if GDP growth decelerated down to around 2% it suggested the system had reached a danger zone of sorts. In a such a weakened state, one good push, or shock, could send the economy plunging into recession.

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FX Daily, September 17: Markets Calm(er)

2019-09-17

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2019-09-17

Overview: Oil prices have stabilized after yesterday's surge. Both Brent and WTI are holding on to around $7-$8 a barrel gain. Equity markets are mixed. Some are attributing the losses in Asia Pacific outside of Japan (Nikkei rose its highest level since late April), Korea and Australia to the rise in oil prices. European shares opened lower are straddling unchanged levels.

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Morgan Stanley forecasts a surprise 25 basis point cut from the SNB

2019-09-17

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2019-09-17

The Swiss National Bank needs to respond to the strong currency and lower rates from the ECB, according to Morgan Stanley. The consensus for Thursday's meeting is no change from -0.75% but Morgan Stanley and UBS are two firms that are forecasting a surprise 25 bps cut.

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Why Are People Now Selling Their Silver? Report 15 Sep

2019-09-17

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2019-09-17

Gold and Silver Prices
This week, the prices of the metals fell further, with gold -$18 and silver -$0.73. On May 28, the price of silver hit its nadir, of $14.30. From the last three days of May through Sep 4, the price rose to $19.65. This was a gain of $5.35, or +37%. Congratulations to everyone who bought silver on May 28 and who sold it on Sep 4.

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CHF/JPY: Eyes on central banks and geopolitics

2019-09-17

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2019-09-17

CHF/JPY levels, September 17
This week the BoJ will hold its regular policy meeting. Global uncertainty, linked to the trade war and Brexit, has strengthened the value of the Swiss franc and Yen. CHF/JPY is struggling to maintain the upside as the Yen picks up a safe haven bid, anchored on geopolitical developments following a textbook risk-off response in global financial markets following the strike on Saudi Arabia’s oil facilities over the weekend.

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Where The Global Squeeze Is Unmasked

2019-09-17

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2019-09-17

US Exports of Goods, NSA 1989-2019
Trade between Asia and Europe has dimmed considerably. We know that from the fact Germany and China are the two countries out of the majors struggling the most right now. As a consequence of the slowing, shipping companies have had to make adjustments to their fleet schedules over and above normal seasonal variances.

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Stuck at A: Repo Chaos Isn’t Something New, It’s The Same Baseline

2019-09-17

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2019-09-17

Money Markets Equivalent, 2017-2019
Finally, finally the global bond market stopped going in a straight line. I write often how nothing ever does, but for almost three-quarters of a year the guts of the financial system seemed highly motivated to prove me wrong. Yields plummeted and eurodollar futures prices soared. It is only over the past few weeks that rates have backed up in what has been the first real selloff since last year.

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Dollar Mixed, Oil Spikes as Markets Digest Saudi Attack

2019-09-16

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2019-09-16

The weekend bombing of Saudi oil facilities continue to reverberate across global markets. The currencies of the oil producing nations are likely to outperform near-term. US rates continue to adjust ahead of the FOMC. UK Prime Minister Johnson is in Luxembourg today to meet with EC President Juncker. China reported weak August IP and retail sales.

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FX Daily, September 16: Oil Surge Pared, Markets Remain on Edge

2019-09-16

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2019-09-16

Overview: Oil prices surged in the initial reaction to the unprecedented drone attack on Saudi Arabia facilities. Saudi Arabia may be able to restore around half of the lost production in a few days. Saudi Arabia and other countries, including the US, prepared to tap strategic reserves, oil prices have seen the initial gains halved. Brent is trading near $65 after finishing last week near $60.

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FX Weekly Preview: Six Things to Watch in the Week Ahead

2019-09-16

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2019-09-16

The prospect of a third trade truce between the US and China helped underpin the optimism that extended the rally in equities.  Bond yields continued to back-up after dropping precipitously in August, led by a more than  30 bp increase in the US yield benchmark.  The Dollar Index fell for the second consecutive week, something it had not done this quarter.

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The Black Swan Is a Drone

2019-09-16

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2019-09-16

What was "possible" yesterday is now a low-cost proven capability, and the consequences are far from predictable. Predictably, the mainstream media is serving up heaping portions of reassurances that the drone attacks on Saudi oil facilities are no big deal and full production will resume shortly.

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