Monthly Archives: January 2015

Swiss Central Bank de-pegs Franc from Euro

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The Swiss Central Bank de-pegged the Franc from the Euro and lowered its interest rate to negative -0.75%.  The Swiss are reacting to the European Central Bank (ECB) plans to print 500B Euros.  They could no longer hold down the value of the Swiss Franc and keep it pegged to the rapidly de-valuing Euro.  Swiss markets are all down, because this will drive up the value of Swiss products in international markets and hurt Swiss exports.  However, this now makes the Swiss Franc possibly the top safe haven currency.

This was a very significant event and all the financial commentators and professionals keep saying nothing like this has ever happened before.  No country has ever purposely raised the value of their currency, nor has a respected central banking system ever fully embraced negative interest rates to combat deflation in an attempt to ignite inflation.

What Made the SNB End the Minimum Exchange Rate? (1-15-15) Bloomberg Video
http://www.bloomberg.com/video/snp-what-made-them-end-the-minimum-exchange-rate-yDVPsbYUS_qRBCXAYyJhqA.html

SNB Ends Minimum Exchange Rate, Cuts Interest Rate (1-15-15) Bloom berg Video
http://www.bloomberg.com/video/snb-ends-minimum-exchange-rate-cuts-interest-rate-uXR2QtLETAWbk0zsCFyS6A.html

SNB Ends Franc Floor, Cuts Interest Rate to -0.75% (1-15-15) Bloom berg Video
http://www.bloomberg.com/video/snb-ends-franc-floor-cuts-interest-rate-to-0-75-MPHRlF5IQTexYU6Me4gUFA.html

FX Strategists on SNB’s Surprise Removal of Franc Cap (1-15-15) Bloom berg Video
http://www.bloomberg.com/video/fx-strategists-on-snb-s-surprise-removal-of-franc-cap-pZ8iQwXERMyQ6dKC2nHr6A.html

SNB Franc Move a `Major Deflationary Shock’: Halpenny (1-15-15) Bloomberg Video
http://www.bloomberg.com/video/snb-derek-halpenny-sees-franc-move-as-deflationary-shock-9JqQH2w8RtO4wEa6azuYKA.html

SNB Had to Act Ahead of QE From the ECB: Sri-Kumar (1-15-15) Bloomberg Video
http://www.bloomberg.com/video/snb-had-to-act-ahead-of-qe-from-the-ecb-komal-sri-kumar-t6GFMtNWT7SmLdK9HT0~vQ.html

Currency Movement, Oil Price Free-Fall Effect, Inflation/Deflation & ECB QE

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I don’t agree with everyone’s predictions, but the discussions of what’s taking place from a variety of opinions and viewpoints is very engaging and there is A LOT taking place.  Most of these are 1-2 pages or  2-3 minute videos.

The articles address very volatile currency movement, the effect of the free-fall in oil prices, inflation/deflation and ECB QE taking place in the last week.

The Commodity Markets Collapsing Beyond Oil (1-13-15) Bloomberg Video
http://www.bloomberg.com/video/oil-decline-part-of-normal-market-volatility-john-taft-xnUzHxXtT~yNCNF1qM9LZQ.html

Venezuela’s Credit Rating Cut to Caa3 by Moody’s (1-13-15) Bloomberg Video http://www.bloomberg.com/video/venezuela-s-credit-rating-cut-to-caa3-by-moody-s-3IiD_APHQSSOn0lLlC1goQ.html

Banks Oil Exposure Concerns Rise as Prices Tumble (1-13-15) Bloomberg Videos
http://www.bloomberg.com/video/banks-oil-exposure-concerns-rise-as-prices-tumble-QdQmM3rTRo~~OO05GGOzsA.html

World’s Best Forecaster Targets Euro for Dollar Parity (1-13-15) Bloomberg Video
http://www.bloomberg.com/video/world-s-best-forecaster-targets-euro-dollar-parity-HEEFh_1XTI6oZsET_caCNw.html

U.K. Inflation Rate Drops to Lowest in Almost 15 Years (1-13-15) By Jennifer Ryan & Tom Beardsworth http://www.bloomberg.com/news/2015-01-13/u-k-inflation-rate-drops-to-0-5-lowest-in-almost-15-years-1-.html

Draghi Faces Legal Test on Bond Buys as ECB Readies QE Plan (1-13-15) By Stephanie Bodoni
http://www.bloomberg.com/news/2015-01-13/draghi-faces-legal-test-on-bond-buys-as-ecb-readies-qe-plan.html

Treasury Yields Rise from 2013 Low Before $21 Billion Auction (1-13-15) By Susanne Walker
http://www.bloomberg.com/news/2015-01-13/treasuries-rise-with-sale-set-to-draw-lowest-yield-in-20-months.html

Dollar Slips on Wages as Oil Drops; Chinese Stocks Drop (1-12-15) Fresh News U.K.- Bloomberg
http://fresh-news-uk.com/news/dollar-slips-on-wages-as-oil-drops-chinese-stocks-drop-bloomberg

ECB Weighs Bond Purchases Up to 500 Billion Euros to Juice Economy (1-10-15)  By Jana Randow http://www.bloomberg.com/news/2015-01-09/ecb-said-to-study-bond-purchase-models-up-to-500-billion-euros.html

Venezuelans Throng Grocery Stores Under Military Protection (1-9-15) By Andrew Rosati & Noris Soto http://www.bloomberg.com/news/2015-01-09/venezuelans-throng-grocery-stores-on-military-protection-order.html

Gross Says Wage Growth Isn’t Great Enough to Sustain U.S. Expansion (1-9-15) By Liz Capo McCormick | http://www.bloomberg.com/news/2015-01-09/gross-says-wage-growth-not-enough-to-sustain-u-s-expansion.html

Why the Fed Worry About Others (1-9-15) Mohamid El-Erian
http://www.bloombergview.com/articles/2015-01-09/why-the-fed-worries-about-others

World’s Best Forecaster Targets Euro-Dollar Parity Currencies (1-9-15) By Lucy Meakin http://www.bloomberg.com/news/2015-01-08/world-s-best-forecaster-targets-euro-dollar-parity-currencies.html

Things Are Going to Get Worse in Europe Eichengreen (1-8-15) Bloomberg Video
http://www.bloomberg.com/video/-things-are-going-to-get-worse-in-europe-eichengreen-aDrhA5yIQPSp2tWyXN5NtQ.html

Pound to Gain Versus Euro on Rates Outlook: BNP Paribas (1-8-15) Bloomberg Video
http://www.bloomberg.com/video/pound-to-gain-versus-euro-on-rates-outlook-bnp-paribas-xqApJV6NRLCY7ZepJDA0_w.html

The BRICs Will Be Cut to the ICs if Brazil & Russia Don’t Shape Up, Warns Phrasemaker O’Neill (1-8-15) By Bloomberg News|  http://www.bloomberg.com/news/2015-01-08/bric-in-danger-of-becoming-ic-says-acronym-coiner-jim-o-neill.html

Euro Drop a Turning Point for Central Bank Reserves (1-7-15) By Lananh Nguyen http://www.bloomberg.com/news/2015-01-07/euro-drop-a-turning-point-for-central-bank-reserves-currencies.html

HSBC Sees Destructive Potential Behind Strong Dollar (1-7-15) Bloomberg Video
http://www.bloomberg.com/video/hsbc-sees-destructive-potential-behind-strong-dollar-MRb2Coa7QN6FGxf8JCdugw.html

Bill Gross Says Good Times Over as Markets Set to Fall (1-6-15) Bloomberg Video
http://www.bloomberg.com/video/bill-gross-says-good-times-over-as-markets-set-to-fall-HzjhS2XTQQWVRGpCtHcjsw.html

Bill Gross Calls It 2015 Is Going to Be Terrible (1-6-15) By Ben Steverman
http://www.bloomberg.com/news/2015-01-06/bill-gross-calls-it-2015-is-going-to-be-terrible.html

A Greek Exit From the Euro Raises Fears of Fiscal Contagion

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It looks like Greece may become the first country to exit the Euro and that the rest of the EU is resigned to the fact this may happen.  This will probably also result in the Greek government defaulting.

A Greek Exit From the Euro Raises Fears of Fiscal Contagion (1-5-15) Simon Kennedy http://www.bloomberg.com/news/2015-01-05/greek-euro-exit-risk-revived-as-merkel-bluff-overlooks-contagion.html