Tag Archive: newsletter

Tidbits Of Further Warnings: Houston, We (Still) Have A (Repo) Problem

2019-10-18

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2019-10-18

Federal Reserve Balance Sheet, 2001-2019
Despite the name, the Fed doesn’t actually intervene in the US$ repo market. I know they called them overnight repo operations, but that’s only because they mimic repo transactions not because the central bank is conducting them in that specific place. What really happened was FRBNY allotting bank reserves (in exchange for UST, MBS, and agency collateral) only to the 24 primary dealers.

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Dollar Broadly Weaker as Brexit Deal Takes Shape

2019-10-17

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2019-10-17

The dollar remains under pressure due to weak US retail sales and rising optimism on Brexit and the trade war. Brexit negotiations remain tense and we should expect a higher than usual noise-to-signal ratio at this stage. China said its goal is to stop the trade war and remove all tariffs. US has a full data schedule; we remain constructive on the US economic outlook.

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FX Daily, October 17: EU-UK Deal Sends Sterling and the Euro Higher

2019-10-17

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2019-10-17

Overview: A Brexit deal between the UK and the EU has been struck. Whether it can win Parliament's approval is a horse of a different color. Meanwhile, US-Chinese relations continue to sour. The capital markets are narrowly mixed as investors await further developments. The MSCI Asia Pacific is consolidated after gaining for the past four sessions.

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Commodities trader Gunvor held criminally liable for corruption

2019-10-17

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2019-10-17

The Geneva-based trading company Gunvor has been ordered to pay almost CHF94 million ($94.6 million), including a fine of CHF4 million over bribery in Africa. The commodities trader failed to prevent its employees and agents from bribing public officials between 2008 and 2011 in order to gain access to the petroleum markets in the Republic of Congo and Ivory Coast, the Office of the Attorney General of Switzerland (OAG) said in a statement on...

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USD/CHF technical analysis: Breaks below 0.9940 confluence support, turns vulnerable

2019-10-17

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2019-10-17

USD/CHF daily chart, June - November 2019
The pair remains under some selling pressure for the second straight session. The ongoing slide dragged it below a two-month-old ascending trend-channel. Bears might now aim towards challenging the 0.9900 round-figure mark. The USD/CHF pair extended this week's rejection slide from the vicinity of the key parity mark and remained under some selling pressure for the second consecutive session.

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Swiss Trade Balance Q3 2019: exports still rising thanks to chemistry-pharma

2019-10-17

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2019-10-17

Swiss exports and imports, seasonally adjusted (in bn CHF), Q3 2019
In the third quarter of 2019, foreign trade showed a positive trend: while exports rose by 0.9%, imports posted double growth (+ 1.8%). Both the first and the second have achieved a record quarterly result. The trade balance is closing with a surplus of 5.9 billion francs.

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Libra cryptocurrency soldiers on despite key departures

2019-10-17

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2019-10-17

Facebook’s cryptocurrency payments project, Libra, has suffered a major blow with the withdrawal of seven key partners. But the Geneva-based Libra Association continues to battle on against a regulatory onslaught by adopting a charter and forming an executive team.

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Dutch Central Bank: Gold Bars ‘Always Retain Their Value, Crisis Or No Crisis’

2019-10-17

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2019-10-17

DNB's gold stock
◆ “Gold is the perfect piggy bank – it’s the anchor of trust for the financial system” says the Central Bank of the Netherlands ◆ “If the system collapses, the gold stock can serve as a basis to build it up again” astutely and prudently observes the Dutch Central Bank ◆ The Dutch people “hold more than 600 tonnes of gold. A bar of gold always retains its value, crisis or no crisis”

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USD/CHF technical analysis: Intraday uptick falters just ahead of parity mark

2019-10-17

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2019-10-17

USD/CHF daily chart, June - October 2019
Despite the intraday pullback, the pair has managed to hold above 200-DMA. The near-term technical set-up support prospects for some dip-buying interest. The USD/CHF pair failed to capitalize on its intraday positive move and faced rejection near the key parity mark, albeit has still managed to hold above the very important 200-day SMA.

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FX Daily, October 16: Fickle Market Tempers Enthusiasm

2019-10-16

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2019-10-16

Overview: Fading hopes that a Brexit agreement can be struck is seeing sterling trade broadly lower, while China's demand that US tariffs be rescinded in exchange for a commitment to buy $40-$50 bln of US agriculture goods over two years, makes the handshake agreement less secure. At the same time, Hong Kong is becoming another front in the US-Sino confrontation.

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Let Me Know When It’s Over

2019-10-16

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2019-10-16

Maybe it's my cheap seat or my general exhaustion, but the whole staged spectacle is beyond tiresome; I've had my fill. Let me me know when it's over: yes, all of it: the impeachment, the trade dispute with China, U.S. involvement in Syria, the manic stock market rally and the 2020 election.

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Gefährliche Scheingewinne bei PKs

2019-10-16

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2019-10-16

Die Schweizer Pensionskassen halten rund 30% ihrer Anlagen in klassischen Obligationen. Die meisten dieser Anleihen weisen eine negative Rendite aus. Dies, weil die Kurse so stark gestiegen sind, dass sich auf deren hohem Niveau trotz positivem Coupon (Nominalzins) eine Rendite auf Verfall von unter null ergibt. Das heisst, dass die erwarteten Kursverluste die Zinserträge übersteigen.

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The CHF is the strongest, while the GBP is the weakest as NA traders enter for the day

2019-10-16

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2019-10-16

Change for the Major Currency Pairs
Well...maybe some NA tradersThe US has a partial holiday with the bond market closed but the US stock markets open. Canada is off for Thanksgiving. So North American traders entering for the day, may be a little stretch today. However, the forex market is open. The CHF is the strongest as some of the euphoria from the events of last week (Brexit hope and China/US) fade and there is a flight into the safety of the CHF (and JPY).

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Spying scandal weighs on Tidjane Thiam’s tenure at Credit Suisse

2019-10-16

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2019-10-16

When Tidjane Thiam arrived at the helm of Credit Suisse in the summer of 2015, he was a hero. Plucked from the same role at UK insurer Prudential, where he had doubled the share price in six years, he had big plans to shrink the Swiss group’s investment bank, slash costs, raise fresh capital and expand in Asia.

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A Gain of 1,080 percent Annualized – One of the Strongest Seasonal Rallies is Starting Right Now

2019-10-16

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2019-10-16

Bitcoin – An Exceptional Asset. When I first heard about Bitcoin (BTC) in May 2011, it was trading at 8 US dollars. Today, more than eight years later, BTC trades at around 8,000 dollars. A thousandfold increase! An investment of 1,000 dollars at the time would have resulted in a gain of more than a million  –  a dream result.

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US Money Supply Growth – Bouncing From a 12-Year Low

2019-10-16

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2019-10-16

US broad true money supply TMS-2, year-on-year growth w. 12-month moving average
True Money Supply Growth Rebounds in September. In August 2019 year-on-year growth of the broad true US money supply (TMS-2) fell to a fresh 12-year low of 1.87%. The 12-month moving average of the growth rate hit a new low for the move as well. The main driver of the slowdown in money supply growth over the past year was the Fed’s decision to decrease its holdings of MBS and treasuries purchased in previous “QE” operations.

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Dollar Resilient as Cracks in Risk-On Appear

2019-10-16

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2019-10-16

Some cracks have appeared in the market’s risk-on sentiment. We continue to believe that recent developments take some pressure off the Fed to cut rates again this month. Our base case for a Brexit delay has been strengthened; UK reported weak labor market data. The situation is Turkey continues to develop negatively for asset prices; trade data out of China once again showed the impact of the trade war and the resulting global slowdown.

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FX Daily, October 15: Non-Disruptive Brexit Hopes Remain Elevated

2019-10-15

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2019-10-15

Overview: Ideas that a Brexit deal may be close is helping to firm sterling, while soft Chinese PPI offset the spike in food prices to show the weakness of the world's second-largest economy. Minutes from the meeting of the Reserve Bank of Australia earlier this month kept a door open to a rate cut before the end of the year.  Japan returned from holiday, and the Nikkei gapped higher, and its nearly 1.9% advance led the MSCI Asia Pacific Index...

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Swiss Producer and Import Price Index in September 2019: -2.0 percent YoY, -0,3 percent MoM

2019-10-15

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2019-10-15

Switzerland Producer Price Index (PPI) YoY, September 2019
15.10.2019 - The Producer and Import Price Index fell in September 2019 by 0.3% compared with the previous month, reaching 101.1 points (December 2015 = 100). This decline is due in particular to lower prices for petroleum products and scrap. Compared with September 2018, the price level of the whole range of domestic and imported products fell by 2.0%.

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USD/CHF technical analysis: Pivots around 200-day SMA, near mid-0.9900s

2019-10-15

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2019-10-15

USD/CHF daily chart, July-November 2019
Continued with its struggle to extend the momentum beyond 200-DMA. Bears eye a decisive break below the ascending trend-channel support. Bulls are likely to await a sustained strength above the key parity mark. The USD/CHF pair failed to capitalize on last week's attempted rebound from a support marked by the lower end of a two-month-old ascending trend-channel and met with some fresh supply on Monday.

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