Tag Archive: newsletter

Cool Video: Clip from CNBC Squawk Box

2018-10-09

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2018-10-09

Marc Chandler
The combination of divergence and the US policy mix is underpinning the dollar and I was invited to share my views on CNBC's Squawk Box earlier today. It dovetailed nicely Matthew Diczok (from Merrill Lynch) views on Fed policy and US interest rates.

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How Dangerous is the Month of October?

2018-10-09

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2018-10-09

The largest one-day declines in the DJIA in history
A Month with a Bad Reputation. A certain degree of nervousness tends to suffuse global financial markets when the month of October approaches. The memories of sharp slumps that happened in this month in the past – often wiping out the profits of an entire year in a single day – are apt to induce fear. However, if one disregards outliers such as 1987 or 2008, October generally delivers an acceptable performance.

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The Toxic Stew, Report 7 Oct 2018

2018-10-08

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2018-10-08

Swiss 10 year Bond History
Last week, we shined a spotlight on a crack in the monetary system that few people outside of Switzerland (and not many inside either) were aware of. There is permanent gold backwardation measured in Swiss francs. Everyone knows that the Swiss franc has a negative interest rate, but so far as we know, Keith is the only one who predicted this would lead to its collapse (and he was quite early, having written that in January 2015).

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FX Daily, October 08: China and European Woes Weigh on Equities but Buoy the Dollar

2018-10-08

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2018-10-08

Overview:  The markets are having a rough adjustment to the return of the Chinese markets are the week-long holiday.  The cut in the required reserves failed to lift investor sentiment.  The Shanghai and Shenzhen Composites fell almost 4%, and the yuan slid nearly 0.8%.  It is an unusually large decline for the closely managed currency.  The offshore yuan fell by a little more than 0.5%. 

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Rückenwind für die SNB

2018-10-08

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2018-10-08

Die Nationalbank hat die Schweizer Zahlungsbilanz für das zweite Quartal veröffentlicht. Damit bietet sich erstmals die Gelegenheit, nachzuprüfen, ob die viel zitierten Europaängste Fluchtkapital ins Land gespült haben. Zur Erinnerung: Im März wurde in Italien ein neues Parlament gewählt, die den beiden Europagegnern und Anti-Establishment-Formationen Movimento 5 Stelle und Lega eine Mehrheit bescherten.

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Digitization ‘to cost one million jobs’ in Switzerland

2018-10-08

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2018-10-08

The growing trend of digitization in the economy will render a million Swiss jobs redundant in the next 12 years, according to a new study. Some 800,000 jobs will be clawed back by new IT openings, but much of the workforce will need to be re-trained, warns consultancy firm McKinsey. Automation will mainly take the place of manual labour, office and retail workers, says the NZZ am Sonntag newspaper, which has seen an advance copy of the McKinsey...

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FX Weekly Preview: Has an Inflection Point been Reached for Investors?

2018-10-08

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2018-10-08

Interest rates, led by the US, have accelerated to the upside. With price pressures generally rising and oil prices at four-year highs, it is understandable. Market participants need to see the breakout that has lifted US 10-year yields to their highest level in seven years is confirmed in subsequent price action.

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The Global Distortions of Doom Part 1: Hyper-Indebted Zombie Corporations

2018-10-08

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2018-10-08

The defaults and currency crises in the periphery will then move into the core. It's funny how unintended consequences so rarely turn out to be good. The intended consequences of central banks' unprecedented tsunami of stimulus (quantitative easing, super-low interest rates and easy credit / abundant liquidity) over the past decade were: 1.

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US Stocks and Bonds Get Clocked in Tandem

2018-10-08

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2018-10-08

30 Year Bond and 10 Year Note Yields, Nov 2016 - Oct 2018
At the time of writing, the stock market is recovering from a fairly steep (by recent standards) intraday sell-off. We have no idea where it will close, but we would argue that even a recovery into the close won’t alter the status of today’s action – it is a typical warning shot. Here is what makes the sell-off unique:

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Swiss take the Train more often, and further, than European Neighbours

2018-10-07

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2018-10-07

The latest Europe-wide figures confirm Switzerland’s reputation as a country of trains, with average trips and kilometres covered per habitant far higher than elsewhere. Some 72 trips and 2,463 kilometres: this was the average train time for each Swiss resident in 2016, according to Eurostat figures reported Tuesday by Litraexternal link, the Swiss information service for public transport.

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Switzerland, Model of Freedom & Wealth Moving East – Interviews with Claudio Grass

2018-10-07

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2018-10-07

Last month our friend Claudio Grass, roving Mises Institute Ambassador and a Switzerland-based investment advisor specializing in precious metals, was interviewed by Sarah Westall for her Business Game Changers channel.

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Great Graphic: The Dollar’s Role

2018-10-06

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2018-10-06

Currency's Share of the Category in the International Monetary System Q4 2017
This Great Graphic comes from Peter Coy and team's article in Business Week. It succinctly shows three metrics for the internationalization of domestic currencies: global payments, international bonds, and foreign exchange reserves. It does not strike me as surprising, and the role of the euro as a payments currency reflects its role in intra-European trade.

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Perth Mint’s Gold and Silver Bullion Coin Sales Soar In September

2018-10-06

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2018-10-06

Sales of gold products by the Perth Mint surged in September to their highest since January 2017, while silver sales more than doubled from August to mark an over two-year peak, boosted by lower bullion prices, the mint said on Wednesday.

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FX Daily, October 05: US Jobs Data will Test Dollar Bulls and Bond Bears

2018-10-05

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2018-10-05

The US dollar is firmer against most of the major and emerging market currencies. The yen and sterling are resisting the pressure, while the South African rand and Russian rouble are paring some of this week's declines. US equity losses yesterday weighed on Asian and European trading today.

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Swiss Consumer Price Index in September 2018: +1.0 percent YoY, +0.1 percent MoM

2018-10-05

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2018-10-05

Switzerland Consumer Price Index (CPI) YoY, September 2018
The consumer price index (CPI) increased by 0.1% in September 2018 compared with the previous month, reaching 101.9 points (December 2015 = 100). Inflation was 1.0% compared with the same month of the previous year. These are the results of the Federal Statistical Office (FSO).

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Further consolidation of EUR/USD rate likely

2018-10-05

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2018-10-05

EUR/USD vs. GDP Growth Differential, 2000-2019
Short-term noise means we are neutral on the euro over the next three months, but see potential for its gradual appreciation against the dollar thereafterWe have long argued that growth and interest rate differentials are two key components for the direction of the US dollar. Both these drivers should continue to support the dollar over the short term.

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Swiss investments in Turkey drop by half

2018-10-05

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2018-10-05

The severe policies of President Recep Tayyip Erdogan have led to Swiss companies decreasing their investments in Turkey by 50% compared to the average over the past decade, Swiss Public Television SRF reports. Over the last ten years, Swiss companies have on average invested some CHF200 million ($202 million) in Turkish markets, but today the figures amount to roughly half that.

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A Few Questions From Today’s BOND ROUT!!!!

2018-10-05

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2018-10-05

Benchmark 10-year UST 2017-2018
On April 2, the benchmark 10-year US Treasury yield traded below 2.75%. It had been as high as 2.94% in later February at the tail end of last year’s inflation hysteria. But after the shock of global liquidations in late January and early February, liquidity concerns would override again at least for a short while. After April 2, the BOND ROUT!!!! was re-energized and away went interest rates.

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FX Daily, October 04: Dollar Consolidates Gains while Yields Continue to Rise

2018-10-04

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2018-10-04

The US dollar is consolidating yesterday's gains against most of the major currencies, though the dollar bloc is underperforming. Bond yields are moving higher, and equities are lower. With a light data and events stream, the price action itself is the news.

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Study finds Swiss economy is looking up, but risks abound

2018-10-04

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2018-10-04

Switzerland's GDP is on track this year to increase by 2.9%, according to a forecast by Zurich's KOF Swiss Economic Institutepublished Wednesday. This positive outlook is tempered by concerns over the potentially negative impact of global trade wars and a no-deal Brexit on the neutral nation.

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