Tag Archive: newsletter

A Stock Market Crash Scenario

2019-06-14

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2019-06-14

A Stock Market Crash Scenario
Herds get spooked and run. That's the crash scenario in a nutshell. We have all been trained by a decade of central bank saves to expect any stock market swoon will soon be reversed by central bank sweet talk and/or rate cuts. 

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Pound to Swiss Franc forecast: Brexit limbo hurting Sterling

2019-06-14

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2019-06-14

Political uncertainty & Brexit cause sterling weakness. The pound’s value is being predominantly dictated by Brexit. Over the past month sterling has gradually declined in value against the Swiss franc. There is potential for further falls for the pound due to the lack of clarity surrounding Brexit and the leadership battle for the new Conservative leader.

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Bund yields-Heading further down?

2019-06-14

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2019-06-14

Our central forecast is for Bund yields to rise (feebly) into positive territory by the end of this year, although risks are tilting to the downside.Four main factors have been driving down the 10-year Bund yield, which reached an all-time low of -0.26% on June 7. Considering changing circumstances, we have lowered our year-end target for the 10-year Bund yield from 0.3% to 0.1% and expect it to remain in negative territory until at least October...

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FX Daily, June 13: Financial Statecraft or Whack-a-Mole

2019-06-13

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2019-06-13

Overview: After roiling the markets by threatening escalating tariffs on Mexico, US President Trump has threatened China that if Xi does not meet him and return to the positions that the US claims it had previously, he will through on imposing tariffs to the remaining goods the US buys from China that have not already been penalized. 

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Swiss government predicts moderate economic growth in 2019

2019-06-13

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2019-06-13

The State Secretariat for Economic Affairs (SECO) is expecting the Swiss economy to grow by +1.2% in 2019, it said on Thursday. It revised its economic forecast upwards slightly from +1.1% in March, following 0.6% growth in the first quarter thanks to vigorous domestic demand.

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Monetary policy assessment of 13 June 2019

2019-06-13

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2019-06-13

SNB Switzerland Conditional Inflation Forecast
The Swiss National Bank is maintaining its expansionary monetary policy, thereby stabilising price developments and supporting economic activity. Interest on sight deposits at the SNB is unchanged at –0.75%. The SNB will remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration.

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Swiss Producer and Import Price Index in May 2019: -0.8 percent YoY, unchanged MoM

2019-06-13

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2019-06-13

Switzerland Producer Price Index (PPI) YoY, May 2019
13.06.2019 - The Producer and Import Price Index remained unchanged in May 2019 compared with the previous month. The index stood at 102.2 points (December 2015 = 100). Petroleum products in particular saw higher prices, while chemical and pharmaceutical products became cheaper. Compared with May 2018, the price level of the whole range of domestic and imported products fell by 0.8%.

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Commodities And The Future Of China’s Stall

2019-06-13

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2019-06-13

China Exports, 2006-2019
Commodity prices continued to fall last month. According to the World Bank’s Pink Sheet catalog, non-energy commodity prices accelerated to the downside. Falling 9.4% on average in May 2019 when compared to average prices in May 2018, it was the largest decline since the depths of Euro$ #3 in February 2016.

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Paul Tudor Jones Likes Gold

2019-06-13

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2019-06-13

Gold Hedgers Position, 2009-2019
Gold is Paul Tudor Jones’ Favorite Trade Over the Coming 12-24 Months. In a recent Bloomberg interview, legendary trader and hedge fund manager Paul Tudor Jones was asked what areas of the markets currently offer the best opportunities in his opinion. His reply: “As a macro trader I think the best trade is going to be gold”.

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Great Graphic: Euro’s (OECD) PPP

2019-06-12

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2019-06-12

US President Trump recently bemoaned the fact that the euro is undervalued. While his critics complain that he is prone to exaggeration, in this case, the euro is undervalued. This Great Graphic a 30-year chart of the euro has moved around its purchasing power parity as measured by the OECD. Currently, the euro is about 22% undervalued, and it has been cheap to PPP since for the past five years.

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FX Daily, June 12: Anxiety Ticks Up, Risks Pared

2019-06-12

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2019-06-12

Overview: The S&P 500 snapped a five-day advance yesterday and set the heavier tone for equities today.  Continued protests in Hong Kong were not shrugged off as they have been in the last couple of sessions.  The Hang Seng's nearly 1.9% decline was the largest in a month and led the region lower. 

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What Would It Take to Spark a Rural/Small-Town Revival?

2019-06-12

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2019-06-12

Merchandise Exports 2015
Recent research supports the idea that this under-the-radar migration is already under way. The decline of rural regions and small towns is a global phenomenon, and the causes are many but boil down to two primary dynamics: 1. Cities and megalopolises (aggregations of cities, suburbs and exurbs) attract capital, infrastructure, markets and talent, and these are the engines of job creation.

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Switzerland has best winter for 11 years

2019-06-12

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2019-06-12

The Swiss Hotel Association recorded a 0.7% increase in overnight stays during the 2018/2019 winter season. From November to April, 16.7 million overnight stays were recorded in Switzerland, 8.8 million by foreign visitors and 7.9 million by Swiss travelers.

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FX Daily, June 11: Markets Take Another Small Step Away from the Edge

2019-06-11

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2019-06-11

Overview: The recovery in equities continues today in light news day.  Nearly all the bourses in the Asia Pacific region rose, led by a 2.6% gain of the Shanghai Composite. The MSCI Asia Pacific Index rose for a third session. European equity benchmarks are rising for the sixth time in the past seven sessions.

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How dovish can Swiss monetary policy go?

2019-06-11

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2019-06-11

ECB's Deposit Rate and SNB's Interest Rate on Sight Deposits
The Swiss National Bank finds itself having to deal with an uncertain growth and inflation outlook as well as persistent external risks, but it is unlikely to pre-empt the ECB on interest rates.At its meeting on 13 June, the Swiss National Bank (SNB) will face an uncertain growth and inflation outlook. Economic data have been mixed and, more importantly, external risks (intensification of trade disputes, Brexit, Italian budget disagreements…) have...

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Oil prices are reeling

2019-06-11

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2019-06-11

Oil Prices, 2018-2019
The escalation in trade tensions, the dimming of global growth prospects and a surge in US export capacity have pushed us to lower our oil forecasts.The recent plunge in prices suggests that oil is acting like a leading indicator of global economic growth, reflecting investors’ concerns that lasting trade disputes will dent future growth and risk pushing the world economy into recession.

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Gold To Reach 6 Year High Over $1,400 on Uncertain Outlook for Global Markets

2019-06-11

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2019-06-11

Gold Markets, 2009-2019
Gold is finally gaining the traction needed to boost prices to a level not seen since 2013 as concern mounts over increased trade war tensions and the global growth outlook. Bullion may touch $1,400 an ounce this year as investors hedge risk, according to Rhona O’Connell, head of market analysis for EMEA and Asia regions at INTL FCStone Inc.

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Irredeemable Currency Is a Roach Motel, Report 9 June

2019-06-10

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2019-06-10

In what has become a four-part series, we are looking at the monetary science of China’s potential strategy to nuke the Treasury bond market. In Part I, we gave a list of reasons why selling dollars would hurt China. In Part II we showed that interest rates, being that the dollar is irredeemable, are not subject to bond vigilantes.

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FX Daily, June 10: Collective Sigh of Relief Lifts Equities, Yields, and the Dollar

2019-06-10

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2019-06-10

Overview: A global sigh of relief that the US will not tariff all its imports from Mexico.  Equities are all higher, and the weekend demonstrations in Hong Kong over a bill allowing extraditions to the mainland for the first time did not deter investors from bidding up the Hang Seng over 2.3%, the most this year.  European equities are following suit. 

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FX Weekly Preview: US Policy Mix Flips and Will Take the Dollar with It

2019-06-10

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2019-06-10

There is a new game, afoot. For the last couple of years, it has been about normalizing policy. Even the Bank of Japan, which has never declared it was tapering, has gradually reduced the amount of government bonds it purchases. Countries like the US, or Canada in 2017, who could raise interest rates were rewarded with stronger currencies.

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