Tag Archive: newsletter

SNB reports a profit of CHF 38.5 billion for the first half of 2019.

2019-07-31

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2019-07-31

SNB Profit and Loss since 1999
The Swiss National Bank reports a profit of CHF 38.5 billion for the first half of 2019. The profit on foreign currency positions amounted to CHF 33.8 billion. A valuation gain of CHF 3.8 billion was recorded on gold holdings. The profit on Swiss franc positions was CHF 1.1 billion. The SNB’s financial result depends largely on developments in the gold, foreign exchange and capital markets.

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Main Street Small Business on the Precipice

2019-07-31

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2019-07-31

Startups as Share of all Businesses, 1979 - 2014
As a generality, the average employee (including financial pundits) has no real experience or understanding of what it takes to start and operate a small business in the U.S. Government employees in the agencies that oversee and enforce regulations on small businesses also generally lack any experience in the businesses they regulate.

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Switzerland’s first integrated crypto asset exchange launched

2019-07-31

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2019-07-31

Smart Valor, the country’s first integrated cryptocurrency exchange offering custody, trading and brokerage, has gone live with nine crypto-fiat trading pairs. The assets on Zug-based platform, that was launched in 2017 as part of the Thomson Reuters Incubator, includes crypto currencies and security tokens.

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FX Daily, July 30: Sterling Pounded

2019-07-30

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2019-07-30

Overview:  The prospect of a no-deal Brexit continues to pound sterling lower.  A little more than two months ago, it was testing $1.32.  Two weeks ago it was around $1.25.  Today it traded near $1.2120 before stabilizing.  On the other hand, the 10-year Gilt yield is below 65 bp, a new multiyear low, while the international-laden FTSE 100 is holding its own in the face of heavier equity prices in Europe.

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Obvious Capital Consumption, Report 28 Jul

2019-07-30

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2019-07-30

Gold and Silver Price
We have spilled many electrons on the topic of capital consumption. Still, this is a very abstract topic and we think many people still struggle to picture what it means. Thus, the inspiration for this week’s essay. Suppose a young man, Early Enterprise, inherits a car from his grandfather. Early decides to drive for Uber to earn a living. Being enterprising, he is up at dawn and drives all day.

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Switzerland assists Japanese probe into Carlos Ghosn 

2019-07-30

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2019-07-30

Canton Zurich’s public prosecutor is assisting the Japanese authorities in an inquiry related to bank accounts associated with Carlos Ghosn, the former leading auto executive. Tokyo prosecutors sent a request for legal assistance to Switzerland in January, a spokesperson for the country's Federal Office of Justice (FOJ) told swissinfo.ch.

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China’s Big Gamble(s): Betting on QE Again?

2019-07-30

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2019-07-30

China GDP, 2001-2019
As an economic system, even the most committed socialists had come to realize it was a failure. What ultimately brought down the Soviet Union wasn’t missiles, tanks, and advanced air craft, it was a simple thing like bread. You can argue that Western military spending forced the Communist East to keep up, and therefore to expend way too much on guns at the expense of butter.

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Uptick in site deposits puts the spotlight on SNB intervention in the franc

2019-07-29

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2019-07-29

SNB Sight Deposits Increased, 2016-2019
Has the SNB started to intervene. The weekly site deposit data from the Swiss National Bank showed a small uptick but with some perspective, it's a notable turn. Bloomberg highlights the bump and what looks like a bid to keep EUR/CHF above 1.10.

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FX Daily, July 29: Prospects of a No-Deal Brexit Weigh on Sterling

2019-07-29

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2019-07-29

Unrest in Hong Kong and disappointing earnings reports from South Korea weighed on local equity markets, and the MSCI Asia Pacific Index fell for the third consecutive session. European equities are edging higher in tentative trading. The Dow Jones Stoxx 600 is firmer for the sixth session of the past seven. US shares are little changed after record-high closes before the weekend.

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Lucerne Considers Coach Tax, other Measures to Manage Tourist Influx

2019-07-29

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2019-07-29

One of the most popular destinations in Switzerland is reviewing its tourism strategy and mulling introducing coach fees in a bid to curb traffic woes and other disruptions caused by the large number of tourists it welcomes.

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World’s Central Banks End Pact That Limited Selling Of Gold

2019-07-29

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2019-07-29

Central Bank Demand, 1971 - 2018
In a surprising announcement on Friday morning, the European Central Bank said the 21 signatories of the 4th Central Bank Gold Agreement (CBGA) "no longer see the need for formal agreement" as the market has developed and matured, and as a result the signatories "decided not to renew the Agreement upon its expiry in September 2019."

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FX Weekly Preview: The FOMC and US Jobs Headline the Week Ahead

2019-07-29

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2019-07-29

There is little doubt that the Federal Reserve will ease monetary policy at the conclusion of the FOMC meeting on July 31. We never thought the chances of a 50 bp move were anything but negligible, though even at this late stage, the market appears to be pricing in about a one-in-five chance.

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Why Is What Was Once Affordable to Many Now Only Affordable to the Wealthy?

2019-07-29

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2019-07-29

S-curve of Rapid Expansion, Stagnation and Decline
Let's start with an excerpt from a recent personal account by the insightful energy/systems analyst Ugo Bardi, who is Italian but writes his blog Cassandra's Legacy in English: Becoming Poor in Italy. The Effects of the Twilight of the Age of Oil.

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Federal Court to give verdict on UBS tax evasion case 

2019-07-28

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2019-07-28

Swiss Federal Court
The Swiss Federal Court is to decide on Friday whether Swiss bank UBS should handover data on its French clients to Paris tax authorities as part of a crackdown on suspected tax evasion. The decision has been described as key for Swiss banking circles.

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Real Estate Perfectly Sums Up The Rate Cuts

2019-07-28

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2019-07-28

NAR Existing Home Sales, Jan 2011 - May 2019
It’s only a confusing when you just accept the booming economy of the unemployment rate. From this perspective, 2018 was, and more so 2019 is, a downright conundrum. By all mainstream accounts, this just shouldn’t be happening.

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Expat Swiss Celebrated at Historic Winegrower’s Festival

2019-07-27

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2019-07-27

Colours of the Swiss flag
The expatriate Swiss community has been attending the once-in-a-lifetime Fête des Vignerons, currently taking place on the shores of Lake Geneva. A delegation of Swiss citizens living across the world, including leading members of the Organisation of the Swiss Abroadexternal link (OSA), gathered in Vevey to participate in the event on Thursday.

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Seven Points on the ECB and the Price Action

2019-07-27

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2019-07-27

Confusion
As soon as it was clear that the ECB was not easing today, the euro began to recover, after making a marginal new low for the year (just above $1.11). Draghi made it clear that easing was going to be delivered in September and on several fronts including rates (with mitigating measures like tiering) and new asset purchases (not decided on instruments, which plays into speculation of equity purchases—though I strongly doubt this will materialize).

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US Economic Crosscurrents Reach the 50 Mark

2019-07-27

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2019-07-27

U.S. PMI Chicago Fed NAI, Jan 2006 - July 2019
In the official narrative, the economy is robust and resilient. The fundamentals, particularly the labor market, are solid. It’s just that there has arisen an undercurrent or crosscurrent of some other stuff. Central bankers initially pointed the finger at trade wars and the negative “sentiment” it creates across the world but they’ve changed their view somewhat.

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FX Daily, July 26: Markets Consolidate as the Dollar Index Extends its Advance for the Sixth Consecutive Session

2019-07-26

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2019-07-26

Investors are happy for the weekend. Between the ECB, Brexit, and next week's FOMC, BOJ, and BOE meetings, the markets are mostly in a consolidative mode ahead of the weekend. The first look at Q2 US GDP is the last important data point of the week, though it is unlikely to impact next week's Fed decision.

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Swiss Central Bank under Pressure as Franc Rises

2019-07-26

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2019-07-26

Swiss Franc Exchange Rate
Yesterday, the Swiss franc reached its highest level against the euro in two years. The EUR/CHF exchange rate reached 1.097 on 24 July 2019, a rate not seen since early 2017. Upward pressure on the franc is partly being driven by expectations of interest rate cuts by eurozone and US central banks. In addition, the franc is considered a safe haven currency and typically rises when global risk perceptions rise.

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