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Wonder if our administration will go after them the way it is going after China for doing same.

Bad to buy dollars and US treasury securities vs your currency to support your exports — currency manipulation.

Good to buy dollars to buy treasury securities to, in the words of Secretary of State Clinton, enable the US to buy your products.

US policy could not be more confused and contradictory.

SNB Attention May Have ‘Shifted’ to Targeting Dollar, RBC Says

By Daniel Tilles

July 10 (Bloomberg) —The Swiss National Bank may target the franc’s appreciation against the dollar more than the euro, according to RBC Capital Markets.

“Since the SNB started intervening in March, euro-franc is up 2.2 percent, but dollar-franc is down over 9 percent,” Sue Trinh, a senior currency strategist in Sydney, wrote today in a report. “If the SNB’s attention has now shifted to dollar- franc, it would be consistent with the SNB’s change in tactics from intervening via euro-franc to dollar-franc in their most recent round of intervention and suggests dollar-franc may now be the better way to express the threat of SNB intervention at current levels.”

The dollar rose 0.5 percent to 1.0842 francs as of 8:10 a.m. in Zurich.

SNB to Maintain Currency Purchases, Roth Tells Handelsblatt

By Simone Meier

July 10 (Bloomberg) —The Swiss central bank will continue to buy foreign currencies if needed to weaken the franc and prevent deflation, President Jean-Pierre Roth told Handelsblatt.

“We stick to our policy in a decisive manner,” Roth told the newspaper in an interview published today. “We don’t announce an exchange-rate target but observe that the franc hasn’t appreciated further.”

While the Swiss National Bank is “relatively well prepared” to withdraw its stimulus measures, the bank is “still far away from a change in rate policy,” Roth said.

The Swiss economy could return to “slightly positive” growth rates in 2010 after shrinking between 2.5 percent and 3 percent this year, according to Roth. He called it a “good sign” that UBS AG, the country’s largest bank, managed to find private investors. “It shows that the market has regained confidence in the bank and that there’s light at the end of the tunnel,” Roth told Handelsblatt.


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Drop in crude


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>   
>   (email exchange)
>   
>   Warren, Seems like we’ve seen a tiny repeat of what happened during
>   the ( Mosler coined) Mike Masters inventory liquidation last summer.
>   That is, crude oil drops and takes everything else down with it all driven
>   by the fear of increased scrutiny regulation on commodity speculation.
>   Do you agree? NY Times article a few days ago.
>   

Yes, also the fact that it’s done it for the last few years about this time gets the specs going in that direction as well. If there’s nothing ‘fundamental’ going on this year it could quickly reverse as Saudis hold price and let quantity adjust.

Also, lower crude makes dollars harder to get overseas (our oil bill goes down) which tends to firm up the dollar.


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Trade/Michigan


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Karim writes:

  • Trade improves both in balance and direction, likely benefitting from inventory restocking as goods balance improves much more than services balance
  • Exports up 1.6% and imports down 0.6%
  • Real trade balance narrows by 3.9bn; will likely boost Q2 GDP estimates by 0.25-0.50% (median estimate now -1.8%)
  • Import prices up 3.2%, 0.2% ex-petroleum and -0.1% from China (now -2.4% y/y)
  • Michigan survey much lower than expected (64.6 vs prior 70.8) and at lowest level since March
  • Consistent with other surveys (ABC, Conf Board)
  • Lower gas prices may help in weeks ahead but still strong headwinds from labor market


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