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EUR/CHF

  • #7,501
  • Jun 8, 2012 6:03am Jun 8, 2012 6:03am
Just a feelig, there are also some advantages for SNB to act after the rate decision and Greek election.

1. Fewer longs and more short with EUR/CHF, easier to weaken CHF.

2. Better "surprise" effect.

I just cant see SNB wants to do something when everyone is anticipating for.

If this is SNB's plan, maby next week we will only see a small pop and then back down to 1.2010
  • #7,502
  • Jun 8, 2012 6:28am Jun 8, 2012 6:28am
Quoting tim10167
Just a feelig, there are also some advantages for SNB to act after the rate decision and Greek election.

1. Fewer longs and more short with EUR/CHF, easier to weaken CHF.

2. Better "surprise" effect.

I just cant see SNB wants to do something when everyone is anticipating for.

If this is SNB's plan, maby next week we will only see a small pop and then back down to 1.2010
I don't see why SNB should be so 'unkind' to pop a surprise when our longs are reduced the week after.

By not letting us speculators make our profits will not benefit SNB in any way. But when we are long eurchf it does help weaken the chf also right?
  • #7,503
  • Jun 8, 2012 7:44am Jun 8, 2012 7:44am
Any chance of seeing 1.3000 this year?
  • #7,504
  • Jun 8, 2012 7:45am Jun 8, 2012 7:45am
Quoting alaneth
I don't see why SNB should be so 'unkind' to pop a surprise when our longs are reduced the week after.

By not letting us speculators make our profits will not benefit SNB in any way. But when we are long eurchf it does help weaken the chf also right?
I agree that letting speculators make a profit and make us on SNB's side is a smart way to maintain a floor. But on the other hand, the Swiss right wing politicians are also blaming SNB's losses, the nature of SNB is also a bit different to other central banks. it is a "company" with shareholders. And remember, SNB also needs to offload Euro itself.
  • #7,505
  • Jun 8, 2012 9:45am Jun 8, 2012 9:45am
Quoting alexcee
Any chance of seeing 1.3000 this year?
Very little chance I think. Only way to reach there this year is thru intervention. Wait till Sept 14th SNB. I think at least 1year is needed for a 'review' of the peg. We need pressure from the Swiss industry & exporters to raise the peg to increase competitiveness.

Another way (just joking) is to print more CHF, buy lots of Euros with it & bail out Greece, Italy, Spain - be the savior of EU crises.
  • #7,506
  • Jun 8, 2012 9:47am Jun 8, 2012 9:47am
in a new survey from reuters about the 1.20 peg, most asked economists think the SNB will be able to defend it, even if the euro crashs.
Only 2 of 13 asked economists expect that 1.20 will not hold.

http://www.format.at/articles/1223/9...ro-untergrenze
  • #7,507
  • Jun 8, 2012 9:50am Jun 8, 2012 9:50am
Quoting tim10167
I agree that letting speculators make a profit and make us on SNB's side is a smart way to maintain a floor. But on the other hand, the Swiss right wing politicians are also blaming SNB's losses, the nature of SNB is also a bit different to other central banks. it is a "company" with shareholders. And remember, SNB also needs to offload Euro itself.
Yes, you are right.... SNB is different & it is going to be difficult to get rid of all the € it has amassed recently.
  • #7,508
  • Jun 8, 2012 10:03am Jun 8, 2012 10:03am
The last time Switzerland imposed negative interest rates which failed was in the late 1970s. After more than 30yrs, why not try it out again? There is no harm in trying, but only a small -ve rate such as -0.25% to -0.5% to try out. Sweden did that for a while & all is well.

A tax on foreign deposits is the equivalent as imposing a -ve interest rate. So either way, I see than SNB has no other choice than to go below zero to stop hot heavy inflows of money.
  • #7,509
  • Edited 12:33pm Jun 8, 2012 10:12am | Edited 12:33pm
Quoting tim10167
Just a feelig, there are also some advantages for SNB to act after the rate decision and Greek election.

1. Fewer longs and more short with EUR/CHF, easier to weaken CHF.

2. Better "surprise" effect.

I just cant see SNB wants to do something when everyone is anticipating for.

If this is SNB's plan, maby next week we will only see a small pop and then back down to 1.2010
Yeah, good point and lets not forget the facts:

1 primary mandate of SNB is price stability, that they define around CPI +2% yoy
2 the current CPI is -1% compared to the aimed 2%
3 what measures they introduced to achieve their goal and fullfill the primary mandate
so far:

NOTHING

So I bet they will do something
  • #7,510
  • Jun 8, 2012 11:36am Jun 8, 2012 11:36am
Quoting tim10167
I agree that letting speculators make a profit and make us on SNB's side is a smart way to maintain a floor. But on the other hand, the Swiss right wing politicians are also blaming SNB's losses, the nature of SNB is also a bit different to other central banks. it is a "company" with shareholders. And remember, SNB also needs to offload Euro itself.
Am i wrong, but as long as there is 1.20, there will be no losses...
  • #7,511
  • Jun 8, 2012 11:40am Jun 8, 2012 11:40am
I'll be going to see a fortune teller tomorrow to tell me how long it would take for EURCHF to kiss 1.3000 Cos my life hangs right there.
  • #7,512
  • Jun 8, 2012 12:39pm Jun 8, 2012 12:39pm
Quoting alexcee
I'll be going to see a fortune teller tomorrow to tell me how long it would take for EURCHF to kiss 1.3000 Cos my life hangs right there.
In one year even 1,25 would be hard as SNB should be offloading at least maybe 150bln before, or -2% CPI, that is hard reach with housing bubble. Lets see what 2C (capital controls) bring us.
  • #7,513
  • Jun 8, 2012 12:46pm Jun 8, 2012 12:46pm
Quoting Swissie
Am i wrong, but as long as there is 1.20, there will be no losses...
and profit when raising the floor (private and corporate)
  • #7,514
  • Jun 8, 2012 1:26pm Jun 8, 2012 1:26pm
sell!! just everybody sell!!
: D
  • #7,515
  • Jun 8, 2012 2:49pm Jun 8, 2012 2:49pm
Quoting goshko147
sell!! just everybody sell!!
: D

yeah, of course I'll sell, once it gets 1.21.
  • #7,516
  • Jun 8, 2012 5:42pm Jun 8, 2012 5:42pm
http://brucekrasting.blogspot.com/20...#ixzz1xCyXr2v7

SNB Intervention average : 7 mil USD/min during each day of May... ...whhhoooaaaa..too much...at least they are credible...
Speculation converts one man's capital into another man's income
  • #7,517
  • Jun 8, 2012 6:05pm Jun 8, 2012 6:05pm
Quoting Swissie
Am i wrong, but as long as there is 1.20, there will be no losses...
The losses may also occur when after SNB buys EUR/CHF and diversify its EUR into other currencies such as GBP, JPY, CAD....as they want to reduce holding too much EUR
  • #7,518
  • Edited 10:09pm Jun 8, 2012 6:26pm | Edited 10:09pm
Quoting pipxster
Yeah, good point and lets not forget the facts:

1 primary mandate of SNB is price stability, that they define around CPI +2% yoy
2 the current CPI is -1% compared to the aimed 2%
3 what measures they introduced to achieve their goal and fullfill the primary mandate
so far:

NOTHING

So I bet they will do something
I agree, but the problem is though the y/y CPI is mostly negative, but the average m/m CPI reading from the start of this year was positive, therefore the negative CPI Y/Y should stabilize after mid year. Thats why SNB vice chairman Jean-Pierre Danthine said last week he expects inflation to stabilize soon.

But what the SNB didnt see was that the economic slow down is very different this time, it is a world synchronized slow down, we have no "Savior" this time like China and EM back in 2008~2009 as China has to cool down their housing bubble this time. Therefore, like George Soros said few days ago, he expects the EU economy to deteriorate further in the second half and eventually dragging Germany down. If Germany is going to be draged down(already see some weakness in domestic in May figures), it is not hard to predict the Swissy will eventually get dragged down too. So there is a good chance(60%~70%) to see Swiss CPI deteriorate further. But for now, SNB just dosent see it as central banks are normally bad at predicting the "future". Remember just a few months ago how positive was SNB on its economy?
  • #7,519
  • Jun 8, 2012 6:38pm Jun 8, 2012 6:38pm
Quoting pipxster
In one year even 1,25 would be hard as SNB should be offloading at least maybe 150bln before, or -2% CPI, that is hard reach with housing bubble. Lets see what 2C (capital controls) bring us.
Agree, it is very hard, the other problem is even though the Swiss exporters are starting to suffer now, but it is not severe enough, the unemployment rate still hasnt go up even in May. They are still "holding" on to it even just "barely". So, iam waiting for the second half for things to deteriorate further. Only export and unemployment along with negative CPI deteriorate further we will see SNB really forced to lift the floor. SNB dont see it now in the near term therefor there are not enough forces to push SNB lift the floor
  • #7,520
  • Jun 8, 2012 7:39pm Jun 8, 2012 7:39pm
Quoting cipid2012
http://brucekrasting.blogspot.com/20...#ixzz1xCyXr2v7

SNB Intervention average : 7 mil USD/min during each day of May... ...whhhoooaaaa..too much...at least they are credible...
Good informatoin, thanks, SNB warriors, Charge!!!
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