Tag Archive: newsletter

FX Daily, December 05: US Market Closure may be a Firebreak

2018-12-05

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2018-12-05

The 3%+ drop in the S&P 500 yesterday kept global equities under pressure today, though losses in Asia and Europe were milder. In Asia, only Hong Kong and Taiwan benchmarks lost more than 1%. In Europe, the Dow Jones Stoxx 600 is off about 0.8% in late morning turnover.

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The View from the Trenches of the Alternative Media

2018-12-05

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2018-12-05

What's scarce in a world awash in free content and nearly infinite entertainment content? After 3,701 posts (from May 2005 to the present), here are my observations of the Alternative Media from the muddy trenches. It's increasingly difficult to make a living creating content outside the corporate matrix.

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No Relief for Swiss Renters as Mortgage Rates Barely Move

2018-12-05

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2018-12-05

Apartments Zurich
Every three months the rate of interest used to set Swiss rents is reviewed. If it goes down some renters have the right to request a decrease in rent. This time it remained at 1.50%. The last time it dropped was 2 June 2017 when it fell to 1.5%, its lowest level since 2008.

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The Dollar and Its Rivals

2018-12-05

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2018-12-05

I was in graduate school, studying American foreign policy when I stumbled on Riccardo Parboni's "The Dollar and Its Rivals." This thin volume showed how the foreign exchange market was the arena in which capitalist rivalries were expressed. More than any single book, it set me on a more than 30-year path.

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FX Daily, December 04: Stock Rally Arrested, but Bond and Oil Advance Continues, leaving Dollar in a Lurch

2018-12-04

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2018-12-04

Overview: Equity markets are unable to build on yesterday's advance, but bonds and oil are extending gains. The dollar remains on the defensive and is off again all the major currencies. The lack of a joint statement over the weekend by the US and China and seemingly different interpretations of what was agreed leaves investors in a lurch.

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GBP/CHF Forecast: Brexit Uncertainty Ahead Causing Movement for GBP/CHF

2018-12-04

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2018-12-04

Pile of Swiss Franc Coins
In today’s GBP/CHF forecast we look at why the Pound has been coming under a huge amount of pressure recently against the Swiss Franc. Those that have been following the currency markets will be aware that the pressure on GBP is largely owing to the uncertainty caused by the ongoing Brexit talks.

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Swiss Consumer Price Index in November 2018: +0.9 percent YoY, -0.3 percent MoM

2018-12-04

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2018-12-04

Switzerland Consumer Price Index (CPI) YoY, November 2018
The consumer price index (CPI) fell by 0.3% in November 2018 compared with the previous month, reaching 101.8 points (December 2015 = 100). Inflation was 0.9% compared with the same month of the previous year. These are the results of the Federal Statistical Office (FSO).

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Growth Contraction puts pressure on Italian Government

2018-12-04

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2018-12-04

Italy GDP, Q1 - Q3 2018
The downward revision to 3Q GDP will make the Italian government’s targets more difficult to achieve and complicate the budget debate with Europe. The Italian statistical office’s (ISTAT) final reading showed that the economy shrank 0.1% q-o-q (-0.5% q-o-q annualised) in Q3, whereas a preliminary reading on October 30 showed that growth was flat.

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Inflation outstrips Swiss salary increases

2018-12-04

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2018-12-04

The latest figures show that Swiss salaries have not kept up with inflation. An average Swiss salary rose 0.4% in 2017, compared to inflation of 0.5%. This left the average salary earner 0.1% worse off in real terms over the year.

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Great Graphic: The Dollar Index Climbs a Wall of Worry

2018-12-04

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2018-12-04

To be sure, the Dollar Index is not the dollar. It is not even a trade-weighted measure of the dollar. Two of America's largest trading partners, China and Mexico, are not represented. It is heavily weighted to the euro and currencies that move in its orbit, like the Swiss franc Swedish krona, and arguably the British pound.

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China’s Global Slump Draws Closer

2018-12-04

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2018-12-04

China Manufacturing PMI, Caixin and Non-Manufacturing PMI, May 2010 - Nov 2018
By the time things got really bad, China’s economy had already been slowing for a long time. The currency spun out of control in August 2015, and then by November the Chinese central bank was in desperation mode. The PBOC had begun to peg SHIBOR because despite so much monetary “stimulus” in rate cuts and a lower RRR banks were hoarding RMB liquidity.

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Inflation, Report 2 Dec 2018

2018-12-03

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2018-12-03

Gold and Silver Price
What is inflation? Any layman can tell you—and nearly everyone uses it this way in informal speech—that inflation is rising prices. Some will say “due to devaluation of the money.” Economists will say, no it’s not rising prices per se. That is everywhere and always the effect. The cause, the inflation as such, is an increase in the quantity of money. Which is the same thing as saying devaluation.

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FX Daily, December 03: G20 Fan Animal Spirits

2018-12-03

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2018-12-03

The US and China kept their trade guns cocked at each other but offered the last opportunity for a negotiated settlement before escalation. What is billed as a 90-day freeze on tariff increases is really only 60 days beyond January 1 when Trump had threatened to increase the 10% tariff on $200 bln of Chinese goods to 25%.

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Swiss Retail Sales, October 2018: +1.2 percent Nominal and +0.8 percent Real

2018-12-03

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2018-12-03

Switzerland Retail Sales YoY, October 2018
Turnover in the retail sector rose by 1.2% in nominal terms in October 2018 compared with the previous year. Seasonally adjusted, nominal turnover rose by 1.9% compared with the previous month. These are provisional findings from the Federal Statistical Office (FSO).

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Climate Change Contributes to Surprise Fall in Swiss GDP

2018-12-03

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2018-12-03

Gigerwaldsee dam Switzerland
Third quarter Swiss GDP figures released yesterday show Switzerland’s economy shrank compared to the quarter before. GDP for the quarter to September was down by 0.2% compared to the quarter before, ending an 18-month run of quarterly growth.

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FX Weekly Preview: Dramatic Week Ends with Whimper?

2018-12-03

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2018-12-03

There is an eerie calm in the capital markets today as the G20 meeting gets underway. There is much uncertainty, and the event calendar is chock full next week, with the Brexit debate getting underway in the UK Parliament, the CDU picks a new leader to replace Merkel, possible partial US government closure, Powell's testimony before Congress, OPEC+ meeting, and US employment data.

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Truth Is What We Hide, Self-Serving Cover Stories Are What We Sell

2018-12-03

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2018-12-03

The fact that lies and cover stories are now the official norm only makes us love our servitude with greater devotion. We can summarize the current era in one sentence: truth is what we hide, self-serving cover stories are what we sell. Jean-Claude Juncker's famous quote captures the essence of the era: "When it becomes serious, you have to lie."

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Cool Video: Santa Claus Rally and Trade

2018-12-02

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2018-12-02

Marc Chandler in Fox Business
I was on Fox Business today. Stuart Varney introduced me by asking me about my forecast for a Santa Claus rally--a year-end recovery in equities. From a technical perspective, I liked the fact that the S&P 500 successfully retested last month's lows last week. I liked that the price action made last Friday's price action into an island bottom, with a gap lower opening followed by Monday's gap higher opening.

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Bearish on Fake Fixes

2018-12-02

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2018-12-02

Household Wealth by percentile
The conventional definition of a Bear is someone who expects stocks to decline. For those of us who are bearish on fake fixes, that definition doesn't apply: we aren't making guesses about future market gyrations (rip-your-face-off rallies, dizziness-inducing drops, boring melt-ups, etc.), we're focused on the impossibility of reforming or fixing a broken economic system.

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Great Graphic: Weekly Jobless Claims and the S&P 500

2018-12-01

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2018-12-01

S&P and Weekly Jobless Claims
The softer than expected PCE deflator today plays into the dovish market mood. There may be little that can resist it until next Friday's employment data, which should be another robust report with hourly earnings holding above 3% year-over-year.  Last November, average hourly earnings rose by 0.3%. As this drops out of the year-over-year comparison, even a healthy bounce back from the 0.2% drop skewed by the hurricane will be needed just to hold...

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