Swiss inflation @ -0.3%.They also even lowered their already negative interest rates. This decision doesn't make any sense for me for now, but I am sure there is a reason
No, the Swiss have the same issues as here in the US. Except it's worse because their middle class is bigger. The "official" inflation on every day items is unch but on real estate and services, very high. The whole genesis of the peg was to keep Europeans visiting the country to stimulate the economy. But they have the same problem the US has in that CPI might be low, but the cost to live is exceedingly high.
Yeah I see. But -0.75% interest rates puzzled me (those 2 actions looks like opposites on first sight). From my quick research here is what SNB itself said as a reasons: http://www.snb.ch/en/mmr/reference/pre_20150115/source/pre_20150115.en.pdf They are probably selling euros and removing excess reserves.
Oanda dealing major CHF pairs with a 40 to 60 tick spread. Doens't there just have to be some kind of opportunity there? Just because I am new to this stuff, and a lot of you guys are seasoned vets, has anyone ever seen a 20 big figure move take place in under five minutes, in a market made up of two major currencies? Makes UK pulling out of ERM look like a nice quiet day. If you read and believed Soros when he said that all Pegs eventually fail, usually spectacularly, and bought some far out dated puts and stuck them in a drawer.............................................................
why would they sell excess euros at a loss? money-wise, the SNB was the biggest loser today. that makes no sense. I think mav's thinking is more on point.
Here are some things to think about regarding the SNB courtesy of http://ashraflaidi.com. 1. The immediate focus turns to the ECB. The SNB certainly seems to believe that sovereign QE is coming and comments from Coeure late in the day were another hint. Even without the ECB, the SNB has quit buying and that's a negative for the euro. 2. The Swiss economy is about to be hit by a major shock and a disinflationary problem just became a disinflationary crisis. Exporters are uncompetitive overnight. 3. There is chatter about the SNB selling or altering the composition of its roughly CHF500 billion of reserves. Gold is a possibility and that may have played a small part of the $30 rally on Thursday. 4. Everyone is staying away from EUR/CHF now and analysts are even scared to guess what's next. The takeaway is that no one has strong opinions so momentum trades are likely to dominate. 5. The BOJ is slowly shifting its position on inflation targets and backing away from them. The move away takes the threat of action off the table and officials have even been talking up the yen. Technically, the Dec low of 115.57 is key. 6. With yields collapsing everywhere the high-yielders look better all the time. Stocks have fallen for 5 straight days yet the Australian dollar has been inching higher. The 2.50% yield Down Under is more enticing every day. 7. Many brokers took a hit on the news and at least one was forced to close up. For us, it's not so much a broker story but a liquidity story. It will ultimately mean less money, tighter margins and a more volatile market. It urges for top-notch risk controls. 8. The eurodollar market is slowly losing its love for Fed rate hikes. The Philly Fed was poor at 6.3 vs 18.7 exp and inflation is gone after the oil market made another failed attempt at a rebound. There is more and more talk about the Fed never getting above 1.00% but traders are still asking the question: If not the US dollar, then what? 9. Buried in the news was that retail giant Target is leaving Canada after entering 2 years ago. It helped to snuff out a USD/CAD slide. Investment isn't coming to retail/consumers, it's definitely not coming to commodities and housing is teetering. The next central bank surprise could be a BOC hint at cuts. 10. IMF Managing Director Lagarde was asked about the SNB move today and said she was surprised not to be warned in advance. Jordan declined to comment on if other central banks were informed. We're troubled at the idea that central bankers would or should inform cohorts or that it's standard practice. It opens far too many avenues for leaks and abuse.
Look I totally agree with Maverick Swiss really have very hot real estate market. And because of divergence with eurozone (and especially if ECB does QE, guess where that new money would go) they just said its enough and cut that dependency swiftly (and painfully). Respect for being able to make such a hard decision and don't give a fuck What puzzled me was rate cut even more into negative territory. The only explanation I can have is that their process of depegging also includes getting rid of some excess reserves from the system (it seems that's what they are saying in the press release) . Most likely candidate of course are FX reserves from unsterilized operations to support the peg. Why sell at loss? What can they do? Double down and wait for profit? Maybe they would just leave that loss as permanent increase in reserves, I don't think its big problem for SNB (if they buy back chf and destroy it then they will buy back less chf than they have sold). So following that line of reasoning even more negative interest rates are just temporary to absorb the shock for removing some excess reserves and normalizing which is disinflationary over longer term and then both actions start making sense for me. Just my 2 cents.
Anyone is following palladium? What's up with it? I have negative 30d NLs weekly A down and today monthly A down in the making. All of this while other PMs looks rather good.
Hi everyone , I Trade the ACD Method on forex markets especially EURUSD , and it is succeffull until now , but I can not determine the C point , So my question is , how to determine the C point ? Many Thanks