Tag Archive: QE3

Insane Repo Reminds Us

It was only near the quarter end, that’s what made it so unnerving. We may have become used to these calendar bottlenecks over the years, but they still remind us what they are. Late October 2012 was a little different, though. On October 29, the GC repo rate for UST collateral (DTCC) surged to 52.6 bps. The money market floor, so to speak, was zero at the time and IOER (the joke) 25 bps. We also have to keep in mind the circumstances of that...

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SNB Balance Sheet, Markets and Economy: As Good As It Gets?

Late 2014/early 2015 will perhaps be the closest to a real recovery from the Great “Recession” we shall see in this cycle.  Q1 2015 marked the peak year over year growth rate of GDP in this recovery at 3.76%. That rate compares quite unfavorably with even the feeble post dot com crash recovery high of 4.41% in Q1 2004.

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Fed FOMC: Who is Hawk, Who is Dove? 2015 Update

Composition of the Fed's Federal Open Market Committee (FOMC composition), needed to know if the Fed is opting for quantitative easing or not.

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Quantitative Easing, its Indicators and the Swiss Franc

The main drivers of demand for Swiss francs are the euro crisis and, even more, the behavior of American investors, who go out of the dollar in the fear of bad US economic data and/or Quantitative Easing (QE). Risk-friendly investors move into risky assets like stocks or currencies of emerging markets, while risk-averse investors fear inflation and buy inflation-resistant assets like Swiss francs.

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Balance of Payments Crisis: Did the Fed Cause the Euro Crisis with Excessive Monetary Easing?

The Fed's excessive monetary easing QE2 caused an inflationary period, that created a balance of payments crisis during which the Eurozone members were obliged to introduce excessive austerity measures.

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The “Sell in May, Come Back in October” Effect and the 19 Fortune-Tellers of the FOMC

The U.S. economy regularly improves between October and April, this year additionally fueled by "unlimited" quantitative easing, weaker gas prices and higher competitiveness thanks to a stronger Chinese yuan and weaker Asian economies.   Update 2013: The Case-Shiller index continued to climb in April 2013; it became clear that this year the "Sell in May" …

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The “Get Stress in May and Relax in October Effect” for the SNB

The U.S. economy regularly improves between October and March. The SNB should use the moment to sell some currency reserves. From May on, the typical seasonal effects will push the SNB into a defense.

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Helicopter Money against Animal Spirits and our Critique

The newest paper by McCulley and Poszar "Helicopter Money: or how I stopped worrying and love fiscal-monetary cooperation" presents fiscal policy and monetary policy along these two criteria

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The Big Swiss Faustian Bargain: Differences between SNB, ECB and Fed Money Printing Explained

Potential losses due to money printing are for the Fed: 1.2% of GDP, Bundesbank: 5% of GDP, SNB: 12% of GDP.

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Quantitative Easing, Gold and the Swiss Franc

The main drivers of demand for Swiss francs are the euro crisis, but even more, the behavior of American investors, who go out of the dollar in the fear of further bad US economic data and of Quantitative Easing. This will push down the dollar, and safe-havens like the CHF, gold or the Japanese Yen up. … Continue reading »

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Quantitative Easing: The Fed Wants Americans to Continue Deficit Spending

The main drivers for demand for Swiss francs are the Euro crisis, but even more the behavior of American investors, who go out of the dollar in the fear of further bad US economic data and in the fear of Quantitative Easing. This usually pushes down the dollar and inflation hedges like the Swiss franc and …

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Die Wiederwahl Obamas bedeutet nichts Gutes für die Schweiz

  Barack Obama war und ist der präferierte Kandidat vieler Schweizer. Obama scheint der Mann von Welt zu sein, während vom konservativen Mitt Romney eher feindselige Politik gegen Russland, China und Iran zu erwarten ist. Daher sind die Neutralität- und Frieden-liebenden Schweizer eher auf Obamas Seite. Aber auch wirtschaftspolitisch scheinen viele Eidgenossen Obama zu mögen. …

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Marc Faber: Assets are overpriced, we short metals and Brent now

As we predicted on October 5 or one day later on DailyFX, metals have started their descent, silver lost one dollar, from levels around 35$ last week to 34$ now. Marc Faber joins our view and says that asset prices are quite vulnerable. “I’m not 100% in cash, for the simple reason that I could … Continue reading »

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It’s not simply QE3

Submitted by Mark Chandler, from marctomarkets.com The outcome of the FOMC meeting is not just a new round of quantitative easing, some might call it QE3. What the Fed announced represents a new chapter in its policy response. The first distinguishing aspect of its decision is the open-ended nature of it. While it has not indicated … Continue reading...

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Isn’t it wonderful to trade with a strong central bank behind you?

  Isn’t it wonderful to have a strong central bank like the SNB sitting behind you when trading Forex? Losses are limited to the floor of 1.20 and in the meantime you can gain forward swaps with the higher euro zone interest rates. Today the Swiss National Bank (SNB) decided in its monetary policy assessment …

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SNB prints nearly 5 billion francs in one week, FX traders poised to get ripped off

  As we expected in our post “What’s this crazy movement in EUR/CHF ? SNB Floor Hike ?“, long-time investors, global macro funds and US investment banks are moving into gold and the Swiss franc again.  The SNB had to buy euros and print new Swiss francs of around 5 billion francs last week, as … Continue reading »

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What’s this crazy movement in EUR/CHF ? SNB Floor Hike ?

  On Friday there was a big movement in the EUR/CHF. First it went up to 1.2154,  fell later down to 1.2080 in the main American trading and rose again to 1.21 in the low-volume trading time. We repeat our entry from Friday, because we continuously updated the post after new developments, e.g. after the … Continue reading »

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SNB only major central bank missing at Jackson Hole, are important SNB decisions looming ?

  The Jackson Hole Symposium is traditionally a meeting of global central bankers, here the 2010 attendance list. This year it takes place between August 30 and September 1. Central bankers assemble  The annual economic symposium for central bankers staged by the Federal Reserve Bank of Kansas City begins in Jackson Hole, Colorado (until September 1). …

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FX Technical Outlook, Net Speculative Positions, Global Markets, week August 27

Submitted by Mark Chandler, from marctomarkets.com   There are two main drivers behind the price action in the foreign exchange market and they will likely persist in the days ahead.  First, there continues to be position adjustment ahead of the what promises to be eventful few weeks.  Second, the release of the minutes from the August 1 …

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