Posts Tagged ‘SNB’
May 22, 2013
When the Jazzman’s Testifying
A Faithless Man Believes
He Can Sing You Into Paradise
Or Bring You to Your Knees
–Carole King
Last night’s BLOG warned that the Twitter feeds would create great volatility as the Fed chairman appeared before the Joint Economic Committee and the markets were not disappointed. The precious metals, currencies and stocks all initially staged impressive rallies, until the questioning turned to the Fed’s plans to TAPER the large-scale asset purchases. Bernanke’s testimony was basically a rehash of NYFRB President Dudley’s speech from yesterday. In the prepared TEXT the chairman made it known that “withdrawing policy accommodation at this juncture would be highly unlikely to produce such conditions” (in referring to when the economy would be sound enough to have sustainably higher rates). Further, “a premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further.”
Tags:Ben Bernanke, Fed, MBS, SNB, Thomas Jordan, William Dudley, Yen
Posted in Currency, Fed | 3 Comments »
April 22, 2013
First, I need to clear the air on an issue that is cited over and over, of which causes me great discomfort. In last Thursday’s Financial Times, Robert Pollin and Michael Ash, the two professors who sponsored graduate student Thomas Herndon of UMass-Amherst–and of recent fame for finding the flaws in Rogoff/Reinhart–published the article heard round the world: “Why Reinhart and Rogoff are wrong about austerity.” I am not disputing the results of their work but I am questioning a causal relationship that they note:
(more…)
Tags:Euro, Fed, GDP, Gold, IMF, Italy, MBS, Rogoff/Reinhart, SNB, Spain, Switzerland, U.S. Treasuries
Posted in Austerity, Europe, Switzerland | 4 Comments »
February 14, 2013
Two events roiled the currency market this morning. First, the GDP numbers out of many European economies were weaker than expected. The softness of European economic activity has stirred the complacency of recent buyers of EUROs and caused some unwinding of the EUR/YEN and EUR/GBP cross rates. The second event that unnerved recent buyers of EUROs was a comment by the ECB Governor from Portugal, Vitor Constancio. It was reported that Mr. Constancio said in response to recent Euro strength that “… negative rates always possible.”
(more…)
Tags:Draghi, ECB, EUR/GBP, Eur/Yen, Euro, GDP, quantitative easing, SNB, Swiss Franc, Yen
Posted in Currency, ECB, Europe, SNB | 7 Comments »
February 11, 2013
This week brings the Moscow circus to the world stage. The world’s major economies meet in Moscow as the Russians are presently in the leadership position of the G-20′s rotating presidency. It used to be the G-7 nations that crafted an economic blueprint for the World Bank and IMF to somewhat adhere, but as much of the global economic growth is now in the BRICS and the other emerging economies, the world’s former colonial powers have had to make room for the rising economic nations. Most of the time the G-7 and G-20 meetings have been photo-ops for world leaders, but every once in a great while something constructive actually makes its way into global policy. The immediate global consensus after the Lehman debacle helped stem the global credit markets from total collapse. This G-20 meeting will not be one of the constructive outcomes as the G-20 members are nowhere near any type of consensus.
(more…)
Tags:BRICS, Bundesbank, currency war, EU, EUR/CHF, Fed, G-20, G-7, IMF, Jens Weidmann, Lael Braindard, Philipp Hildebrand, SNB, Yen
Posted in Currency, Europe, Japan, Russia, Switzerland | 12 Comments »
February 5, 2013
Today, French President Francois Hollande called for a managed currency rate for the EURO. It seems that the French are now concerned that the euro is too strong for its fragile economy. The problem is that as long as ECB President Mario Draghi is happy with a stronger euro the French are in a difficult situation. I have argued that a “strong” euro placates the German hard money crowd. All of the ECB‘s monetary policies have stabilized the break-up risk of the EU while not subverting the currency’s value. Mario Draghi can tell the Germans that his policies are being supported by the market and thus keep Bundesbank President Weidmann at bay. While the BOJ, BOE and the FED have had to actively enact QUANTITATIVE EASING, the ECB has actually seen its intervention contract as money has been paid back and collateral returned. (See last week’s repayment of the LTRO funds.) While the YEN, POUND and DOLLAR have been sold by the market, the EURO has attained star status.
(more…)
Tags:AUD/Kiwi, BOE, BOJ, Dollar, Draghi Put, ECB, EUR/CHF, Euro, Fed, Francois Hollande, Mario Draghi, Pound, QE, quantitative easing, RBA, SNB, Yen
Posted in Uncategorized | 3 Comments »
January 30, 2013
Wednesday brings the news of the FED‘s newest intentions. There is no press conference so the FED‘s FOMC statement is released at 1:15 CST. The consensus is for no change in the current FED policy as the recent economic data has been somewhat mixed. Housing data has a positive tone to it but consumer confidence is tepid and even the durable goods data was weaker than the headlines suggested. It seems that some defense orders were brought forward into December to circumvent the possibility of budget sequestration. The VOTE of the FOMC will be of interest as the new year rotation of FED presidents brings a list of new voters. Gone will be Jeffrey Lacker, the dissenter, and the perma dove John Williams from San Fran Fed is a non-voter.
(more…)
Tags:Australian dollar, Fed, FOMC, Kiwi, QE, RBNZ, SNB, Yen
Posted in Currency, Fed, RBNZ, SNB | 2 Comments »
December 13, 2012
Well, the famed modeler from M.I.T. has finally admitted that he has been an avid reader of Notes From Underground and in the world of global macro finance, 2+2=5. The FOMC statement was a surrender to the work of Michael Woodford as was pre-released in a Janet Yellen speech a few weeks ago. The FED will give great credence to a 6.5% unemployment and a 2% inflation threshold, give or take a 0.5% discretionary prerogative. The 6.5% unemployment threshold is also subject to FED discretion for it seems to depend on whether or not the labor participation rate is increasing while the unemployment rate declines.
(more…)
Tags:Ben Bernanke, BOJ, EUR/CHF, FOMC, Gold, gold/euro, gold/Swiss, Janet Yelln, MBS, Michael Woodford, QE4, Shinzo Abe, SNB, Thomas Jordan, U.S. 10-Year Note, Yen, yen/dollar, ZIRP
Posted in BoJ, Currency, Debt Market, Fed, Japan, SNB | 5 Comments »
November 28, 2012
The Chairman of the Swiss National Bank delivered a speech today in Bern, “SNB monetary and investment policy and the impact of the strong Swiss Franc.” The investing world knows that the Swiss have pegged the franc to the euro at 1.20 more than a year ago and have been successful in keeping the floor of the EUR/CHF in place. The result has been a massive growth in the Swiss foreign reserves as the SNB has had to diversify out of some of the euros and into other currencies. Mr. Jordan made it clear that the SNB was “prepared to buy foreign currency in unlimited quantities.” The Swiss will continue to keep the EUR/CHF floor in place as part of its mandate on monetary policy for an overly strong FRANC has a deflationary impact on the Swiss economy.
(more…)
Tags:EUR/CHF, Euro, Fed, monetization, operation twist, QE, SNB, SWF, Thomas Jordan
Posted in Central Banks | 7 Comments »
October 31, 2012
***The Canadian situation became more muddled today with the release of its GDP. BOC Governor Mark Carney and FM Flaherty would love to raise rates in an effort to halt the rise of private debt, but today’s GDP showed a 0.1% decline in growth for the month. It is a real dilemma as the strong Canadian dollar is impacting some sectors of the economy and thus a rate increase to stem credit growth will have a strengthening impact. The GDP release blamed the slowing global economy for the downturn but it has not impacted domestic credit growth because of ultra-low rates. How will the Canadians solve this dilemma as it wants to slow the housing sector to help forestall private loans? This conundrum will test Carney’s position as a leading central banker. Let’s watch to see if it is possible to head off asset appreciation without causing system wide economic pain. Greenspan and Bernanke claim it is not possible. Governor Carney, here’s your chance to help set central banking on a better course.
(more…)
Tags:ADP, BOC, CAD, Dollar, Euro, GDP, IMF, Mark Carney, SNB, Swiss Franc, Yen
Posted in Canada, Currency, data, SNB, Switzerland, United States | 3 Comments »
September 12, 2012
The German High Court sustained the ESM but laid out that the BAILOUT FUND had to stick to its agreed cap (EU190 BILLION) and that as suspected any further moves to enhance the bond buying program would have to be decided by the BUNDESTAG. It sustained the position of Chancellor Merkel for the time being, thus it makes President Draghi’s move to keep the period of financing to the short-term (LTRO FOREVER) a wise strategic move. The BUNDESTAG will be under pressure to adhere to the concept of “STRICT CONDITIONALITY” as Merkel and Schaeuble will have to be very attuned to the mood of the German citizenry as the Merkel government faces national elections in 2013.
(more…)
Tags:Brazilian real, Bundestag, corn, Dutch elections, ESM, EUR/CHF, Euro, FOMC, GCC, Gold, Kiwi, Merkel, oats, platinum, precious metals, RBNZ, SNB, soybeans, Thomas Jordan, Weidmann
Posted in Commodities, Currency, Germany | 4 Comments »
