There were two central bank meetings in the past two days: The Bank of Canada and the European Central Bank. The BOC stayed its current course with no change in policy. Several analysts were looking for more dovish action because of the appreciation of the Canadian dollar but the BOC was wise in noting that a “broad-based decline” in the U.S. exchange rate has contributed to a “further appreciation of the Canadian dollar.” As a result, the BOC has ZERO concerns about its currency appreciating as long as it is BROAD-BASED.
Archive for the ‘Switzerland’ Category
Notes From Underground: The Darkness of Foreign Exchange
December 10, 2020Notes From Underground: Was Trump Addressing Mnuchin or Powell?
November 19, 2019On Monday, Treasury Secretary Steven Muchin and Federal Reserve Chairman Jerome Powell met with President Trump at the White House where the duo “advised” and “forecasted” the economy to the president as 2020 election posturing is in full swing. NOTES FROM UNDERGROUND has maintained that Trump used the tariff threat to cajole Jerome Powell into lowering interest rates, weaken the DOLLAR and end the balance sheet runoff that the administration believed has held back the U.S. economy. What was Powell buying insurance against?
Notes From Underground: Is April The Cruelest Month?
April 29, 2018As T.S. Eliot warned in The Wasteland, April is the cruelest month, as the thaw of winter gives way to hope as the world returns to rejuvenation. April has delivered the first quarter corporate results and it is no exaggeration to state that revenue and earnings have exceeded expectations. However, the equity market results have failed to respond to the robust numbers as the SPOOS have gained a mere 1.25% and remain unchanged on the year. The NASDAQ 100 has been a much better performer as the TECH sector continues to cruise.
Notes From Underground: “A Single Spark Can Start A Prairie Fire” (Mao, 1930)
January 11, 2016You don’t have to be a weather man to know which way the wind is blowing, or so says Bob Dylan. As long as all things are emanating out of China it may be the time to dust off the sayings of Mao for as the talking heads are reminding us daily: “The East Wind Is Prevailing Over the West” in all things financial. THE PROBLEM FOR ME IS I DON’T ACCEPT THAT VIEW AND AM IN THE CAMP OF FORMER DALLAS FED PRESIDENT RICHARD FISHER that all roads lead to the FED and certainly the European Union for providing the tinder for a financial prairie fire. There has been so much volatility during the first six trading days of the year it is difficult to get a handle on what is algo-driven non-fundamental and what may be the commencement of a change in previous momentum trades. Today I will go through a list of POTENTIAL SPARKS TO IGNITE THE FLAMES OF A FINANCIAL FIRE so that we can be aware of what constitutes a genuine change in momentum:
Notes From Underground: Interest Rates In Limbo (Or, How Low Can You Go)?
January 19, 2015Today it was the Danish Central Bank that lowered its interest rates in order to prevent the markets from trying to break the Danish KRONER/EURO peg and lowered the overnight rate to NEGATIVE 0.20% from a NEGATIVE 0.005%. It was unusual that the Danish Bank lowered the rate on a Monday rather than the usual Thursday but some analysts of the Nordic banking system believe the Danes may act again this Thursday after the ECB reveals its QE program. NEGATIVE RATES ARE THE NEW NORMAL! Danish banking authorities maintain that the Danes are not under as much stress as the Swiss were because the reserves at the DCB are 13% below the peak of 2012, the height of the EU financial crisis.
Notes From Underground: December 21 Reissue
January 18, 2015I am reissuing a piece from December 21, 2014 as a reminder of just where the SNB has invested the assets bought by the massive printing of Swiss francs. The Swiss authorities have created a perpetual money machine that “coined” unlimited amounts of francs and exchanged them for other paper assets. The question remains: Who was willing to buy all those francs that the SNB kept selling into the market (and yet the EUR/CHF remained at the 1.20 floor/ceiling)?
Notes From Underground: What Has the Swiss Wrought (Or Why 2+2=5 Is the Paradigm of Global Macro)
January 15, 2015We at Notes From Underground have been pondering the global macro landscape and waiting for the inevitable ECB meeting January 22, and, of course, the Greek elections on Sunday, January 25. While waiting for some sensibility from the EU, the SNB abruptly ended its ridiculous intervention policy, which I have been criticizing for the past 12 months. My readers are well aware–as are followers of Rick Santelli–that I have questioned the wisdom of SNB support of the 1.20 EUR/CHF level.
Notes From Underground: In a 70th Anniversary Redo, I SAY NUTS to Global Financial Markets
December 21, 2014First, as the clouds of sadness begin to lift I want to thank all of those who took time to send a note to the blog and to me in emails for the condolences on the passing of my mentor and friend. In a tribute to one of the great traders, the markets provided volatility reminiscent of a 21 gun salute, or maybe just 21% vol levels and a VIX to go with it.
Notes From Underground: To the Readers of “Notes From Underground”
November 26, 2014Happy Thanksgiving!
It takes readers to make a successful blog and I have been blessed to have readers who are able to add to the discourse that makes for profitable investments and trades. There is no one source for all the answers and a healthy give and take provides for better strategy. Alternative views sometimes urge caution and better trade selection then a one-sided discussion with myself. Again, my wishes to you for a Happy Thanksgiving. I am going to be on with Rick Santelli on Friday morning to discuss whatever he wishes. Hopefully, we’ll discuss SNB, Draghi and whatever else. If any readers have any burning issues, post them in the comments and hopefully they’ll get covered in a very tight time frame.
Notes From Underground: Another G-20 Communique … Yada, Yada, Yada
November 16, 2014The gathering in Brisbane, Australia provided a backdrop for the world’s leaders to reveal their warm and fuzzy sides to the cameras as koalas were distributed for “hugs for the home folk”–see we really care about nature and the environment. As usual, the G-20 meeting ended with the release of a leaders’ communique, which provides areas of future “cooperation” for the global hegemons. The typical areas of concern about the environment and the diminution of fossil fuels are stated, as are areas of concern about the international tax system and globalized funding of terrorism and money laundering.