Tag Archive: newsletter

The Thumbnail Sketch of the Euro You are Looking For

2019-05-16

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2019-05-16

Here is an overview of the broad macro considerations for the euro, with some thoughts about the price action, including volatility. It is shared not so much as an argument as a sketch the considerations that drive a view.

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Protests against 5G mobile continue in Switzerland

2019-05-16

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2019-05-16

Last week, a crowd assembled in Bern outside Switzerland’s federal parliament building to protest the roll out of 5G mobile technology in Switzerland. Switzerland’s “Stop 5G” movement is demanding a halt to further roll out of the technology in Switzerland, a process already well underway. They are demanding a precautionary approach and further research into the health effects.

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Effective Recession First In Japan?

2019-05-16

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2019-05-16

Japan Real GDP, 2008-2019
For a lot of people, a recession is two consecutive quarters of negative GDP. This is called the technical definition in the mainstream and financial media. While this specific pattern can indicate a change in the business cycle, it’s really only one narrow case. Recessions are not just tied to GDP. In the US, the Economists who make the determination (the NBER) will tell you recessions aren’t always so straightforward.

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FX Daily, May 15: Angst Continues

2019-05-15

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2019-05-15

Overview: Disappointing Chinese April data spurred speculation that more stimulus will be forthcoming and bolsters hopes that a trade deal with the US by the end of next month helped Asian Pacific equities advance for the first time this week.  Indonesia, which reported a record trade deficit on the back of collapsing exports (-13.1% year-over-year in April, nearly twice the decline expected after a 10% fall in March) kept the pressure on its...

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Why China Finds it Difficult to Weaponize the Yuan and US Treasuries

2019-05-15

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2019-05-15

It looks so easy on paper. China can sell its holding of US Treasuries and/or weaken the yuan to offset the tariffs and boost exports. It is the first and easy answers from strategists, journalists, and some academics. Often times, it is presented a novel idea; as if diplomats, investors, and policymakers have not thought it.

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Gold Tops $1,300/oz As Trade Wars Escalate and Increased Risk of U.S. War With Iran

2019-05-15

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2019-05-15

Gold in USD, May 2018 - 2019
Gold sees safe haven demand push it to highest in one month as it breaches key $1,300/oz and £1,000/oz levels. U.S. China trade wars escalates as China retaliates and imposes tariffs on $60 billion of U.S. goods. Increased risk of war in Middle East after U.S. alleges Iran bombed Saudi oil vessels destined for the U.S.

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Warmer weather sparks huge hike in Swiss e-bike sales

2019-05-15

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2019-05-15

Unusually warm and dry weather conditions have been credited with boosting bicycle sales last year – with a greater proportion of cyclists opting to ease muscle strain with the assistance of e-bikes in Switzerland’s mountainous terrain. On Tuesday, the cycling enthusiasts group dynaMot added more detail to figures put out by the Swiss Bicycle Suppliers Association in March.

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The Economy Has Fundamentally Changed in the 21st Century–and Not for the Better

2019-05-15

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2019-05-15

Smaller Slice of the Pie
The net result is we have an economy that's supposedly expanding smartly while our well-being and financial security are collapsing. Gross Domestic Product (GDP) and other metrics of economic activity don't measure either broad-based prosperity or well-being. Elites skimming financialization profits by expanding corporate debt and issuing more loans to commoners while spending more on their lifestyles boosts GDP quite nicely while the security and...

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FX Daily, May 14: Too Weak to Muster Much of a Turnaround Tuesday, Markets See Small Reprieve

2019-05-14

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2019-05-14

OECD Gauge hits Lowest Level
President Trump's willingness to meet China's Xi at the G20 meeting at the end of next month and his "feeling" that an agreement will still be found seemed sufficient to break the momentum that had swept through the capital market.

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Pound to Swiss franc forecast: Brexit to continue to drive pound to swiss franc exchange rates

2019-05-14

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2019-05-14

Since the start of the year the general trend for pound to swiss franc exchange rates has seen the pound strengthen. GBP/CHF mid-market levels started the year in the 1.23s and now are trading in the 1.30s. The pound strengthened as UK Prime Minister Theresa May extended Article50 by 6 months, which means the UK will not leave the EU without a deal.

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Swiss Producer and Import Price Index in April 2019: -0.6 percent YoY, unchanged MoM

2019-05-14

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2019-05-14

Switzerland Producer Price Index (PPI) YoY, April 2019
The Producer and Import Price Index remained unchanged in April 2019 compared with the previous month. The index stood at 102.2 points (December 2015 = 100). Higher prices were seen in particular for petrol and machinery, while diesel and heating oil became cheaper.

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Burnout Nation

2019-05-14

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2019-05-14

U.S. Stress, 2012 - 2017
A number of recent surveys reflect a widespread sense of financial stress and symptoms of poor health in America's workers, particularly the younger generations. There's no real mystery as to the cause of this economic anxiety:

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The Monetary Cause of Lower Prices, Report 12 May

2019-05-14

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2019-05-14

Gold and Silver Price
We have deviated, these past several weeks, from matters monetary. We have written a lot about a nonmonetary driver of higher prices—mandatory useless ingredients. The government forces businesses to put ingredients into their products that consumers don’t know about, and don’t want. These useless ingredients, such as ADA-compliant bathrooms and supply chain tracking, add a lot to the price of every good.

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FX Daily, May 13: Investors Still Looking for New Balance

2019-05-13

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2019-05-13

The end of the tariff truce between the US and China has discombobulated investors. They had been repeatedly that a deal was close and there had even been talk at the US Treasury about where Trump and Xi should meet to sign the agreement. Now China was given around a month to capitulate to US demands or face a 25% tariff on their remaining exports to the US.

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FX Weekly Preview: Trade, the Dollar, and the Week Ahead

2019-05-13

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2019-05-13

China is isolated on trade. No one supports its trade practices. The idea that China was going to "naturally" evolve to be more like the US, or Europe for that matter, was always fanciful and naive. The emergence of China, as Napoleon warned two centuries ago, would make the world shake.

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Trade Wars Have Arrived, But It’s Trade Winter That Hurts

2019-05-13

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2019-05-13

U.S. Imports from China, Jan 1989 - 2019
There is truth to the trade war. That’s a big problem because it’s not the only problem. It isn’t even the main one. Given that, it’s easy to look at tariffs and see all our current ills in them. The Census Bureau reports today that the trade wars have definitely arrived. In March 2019, US imports from China plummeted by nearly 19% year-over-year.

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A family apartment in Geneva close to twice the price of one in St. Gallen

2019-05-13

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2019-05-13

On average, renting a 4.5 room apartment of 100 to 110 m2 costs CHF 3,820 a month in Geneva. The same apartment in the Swiss city of St. Gallen costs CHF 2,004, 52% of the price, according to a report on rents in Switzerland’s ten main cities by the price comparison website Comparis. For an apartment of this size, Geneva (3,820) is the most expensive, followed by Zurich (3,073), Lausanne (2,850), Basel (2,660), Bern (2,600), Luzern (2,430),...

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Unrealistically Great Expectations

2019-05-12

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2019-05-12

Declining Wages, 2008 - 2014
Let's see if we can tie together four social dynamics: the elite college admissions scandal, the decline in social mobility, the rising sense of entitlement and the unrealistically 'great expectations' of many Americans. As many have noted, the nation's financial and status rewards are increasingly flowing to the top 5%, what many call a winner-take-all or winner-take-most economy.

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Up to 100 Nestlé jobs in Basel at risk

2019-05-12

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2019-05-12

Nestle is planning to restructure its operations in the Swiss city of Basel. Up to 100 jobs are threatened by cuts or moving production abroad. Some 177 people are employed at Nestlé’s Basel plant, 100 of which could be under threat over the next 18 months, the Swiss food giant announced on Thursday.

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The price of some Swiss trains passes could rise significantly

2019-05-11

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2019-05-11

Some travelers on Swiss trains could be in for a shock. The price of a GA travel card, an annual pass that allows unlimited travel of the Swiss Rail network, might rise 10% in 2021, according to the newspaper Le Matin. Compared to the price of other passes and tickets, the AG pass is relatively good value, according to a leaked internal document written by CH-direct, a pricing association bringing together 250 Swiss public transport companies.

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