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EUR/CHF

  • #8,701
  • Jul 23, 2012 9:32am Jul 23, 2012 9:32am
Quoting tim10167
I will feel a bit uncomfortable holding EUR/CHF longs if Spain fails.....anyone feeling the same way?
I would definately be worried if spain fails
  • #8,702
  • Jul 23, 2012 9:44am Jul 23, 2012 9:44am
Quoting tim10167
I will feel a bit uncomfortable holding EUR/CHF longs if Spain fails.....anyone feeling the same way?
I'm also afraid if Spain fails. The astronomical bond yield sends chills down my spine... Can't sleep easy last few nights.

Hi Alexcee, you were talking about asking a fortune teller some time back....
Any news?
Will the floor hold?
  • #8,703
  • Jul 23, 2012 9:53am Jul 23, 2012 9:53am
Quoting alaneth
I'm also afraid if Spain fails. The astronomical bond yield sends chills down my spine... Can't sleep easy last few nights.

Hi Alexcee, you were talking about asking a fortune teller some time back....
Any news?
Will the floor hold?
Time to close those positions if you cant sleep at night
  • #8,704
  • Jul 23, 2012 9:57am Jul 23, 2012 9:57am
the question is SNB will continu to maintain the same policy in regards of the euro debt crisis wich gettin worse.
  • #8,705
  • Jul 23, 2012 1:48pm Jul 23, 2012 1:48pm
Spanish bailout is now inevitable
Written by Gerry Davies
July 23, 2012 at 18:29 GMT
Anyone disagree with good ol’ Larry?
Thought not…..
So what we talking? 300 bln eurosseems to be awhispered number.
And more importantly how ya trade it?
What y’all think, supportive of the euro?

I wonder if the SNB are ready?
  • #8,706
  • Jul 23, 2012 3:58pm Jul 23, 2012 3:58pm
Quoting tim10167
because swiss trades mostly with europe, i think 70~80% if i remember
EU: Import 77% but export only 58% see

http://www.bfs.admin.ch/bfs/portal/d...elsbilanz.html

and EU is not equal to Eurozone, so only around 50% export goes to Eurozone. Therefore a basket with 50% EUR seems fair.
  • #8,707
  • Jul 23, 2012 4:19pm Jul 23, 2012 4:19pm
We are seeing the end of the euro area. Spain will be rescued next weekend if the ECB buys Spanish and Italian bonds. Eurotitanic is sinking and gold and silver are our only boat. I close my EURCHF positions and I will buy gold and silver physically. Not in the derivatives market. Everything is a bubble and it will explode. Good luck.
  • #8,708
  • Jul 23, 2012 4:32pm Jul 23, 2012 4:32pm
Quoting didi_doedel
EU: Import 77% but export only 58% see

http://www.bfs.admin.ch/bfs/portal/d...elsbilanz.html

and EU is not equal to Eurozone, so only around 50% export goes to Eurozone. Therefore a basket with 50% EUR seems fair.
agree
  • #8,709
  • Jul 24, 2012 3:42am Jul 24, 2012 3:42am
wft is waiting ECB.
  • #8,710
  • Jul 24, 2012 7:33am Jul 24, 2012 7:33am
Quoting matheousse
wft is waiting ECB.
What are the SNB waiting for more like
  • #8,711
  • Jul 24, 2012 7:40am Jul 24, 2012 7:40am
Quoting brinks
What are the SNB waiting for more like
50% of their export markets are now fairly priced...they seem to be quite cool, besides Jordan conservstive + he knows that EU will solve the problems sooner or later(ok rather later than sooner but still) so he can offload later @ 1,3 maybe 200 bln
  • #8,712
  • Jul 24, 2012 7:51am Jul 24, 2012 7:51am
Quoting pipxster
50% of their export markets are now fairly priced...they seem to be quite cool, besides Jordan conservstive + he knows that EU will solve the problems sooner or later(ok rather later than sooner but still) so he can offload later @ 1,3 maybe 200 bln
yep i understand that but if spain blows up they may just get steamrollered.

Isnt the best defense a good offense?
  • #8,713
  • Jul 24, 2012 8:35am Jul 24, 2012 8:35am
Quoting pipxster
50% of their export markets are now fairly priced...they seem to be quite cool, besides Jordan conservstive + he knows that EU will solve the problems sooner or later(ok rather later than sooner but still) so he can offload later @ 1,3 maybe 200 bln
But if they lower the peg to 1,10 and then sell at 1,30 their profit would even be higher.

Or they leave it at 1,10 for 6 month and then force back to 1,20 and cash in.

Or they could go back to 1,15 without loosing money if they lower it to 1,10 now and buy the same amount of EUR as they already have acquired at 1,20.

Anyway, a potential higher offload is no valid argument to keep the peg at 1,20.

A valid argument could be deflation.

What is more important is that the SNB looks after the real estate bubble. As long as interest rates are cheap and CHF becomes cheaper every day from non EUR countries, and Italians or Spanish people can still buy for 1,20 the bubble goes on.

In particular Italians might be interested for two reasons:
- Switzerland is close and has an Italian speaking part
- Italy is a good candidate to leave the Euro zone, see
http://snbchf.com/2012/07/reasons-wh...-next-2-years/

So even if Nord-Euro countries are interested to keep Italy in, Italy may still leave the Euro zone.

And the results of real estate bubbles should now be known to everyone (Japan, US, Ireland, Spain etc.).
  • #8,714
  • Jul 24, 2012 9:39am Jul 24, 2012 9:39am
Quoting didi_doedel
But if they lower the peg to 1,10 and then sell at 1,30 their profit would even be higher.

Or they leave it at 1,10 for 6 month and then force back to 1,20 and cash in.
SNB cannot do anything else & is left with 2 options :

A - Enforce cap controls
B - Buy unlimited EURs to maintain the peg @ 1.2000

They cannot change the peg - it's suicidal!
  • #8,715
  • Jul 24, 2012 10:00am Jul 24, 2012 10:00am
Quoting alaneth
SNB cannot do anything else & is left with 2 options :

A - Enforce cap controls
B - Buy unlimited EURs to maintain the peg @ 1.2000

They cannot change the peg - it's suicidal!
Come on!

They might play a funny game:

They announce that they will peg to 1,15 and go back to 1,20 after just one week. Would you buy for 1,15 ?

If you argue that HF will join forces, why don't they do it now when they may win more ?
  • #8,716
  • Jul 24, 2012 10:05am Jul 24, 2012 10:05am
Quoting didi_doedel
Come on!

They might play a funny game:

They announce that they will peg to 1,15 and go back to 1,20 after just one week. Would you buy for 1,15 ?

If you argue that HF will join forces, why don't they do it now when they may win more ?
Then SNB will lose their credibility & reputation - remember Hilderbrand, then Jordan keeps uttering the "Utmost Determination" word. If they do something funny, the Swiss economy & people will not trust SNB anymore.

The peg is not intended to help us speculators, but for price stability for the Swiss people & business & economy. It is not something they can play about so easily. Remember in 4-5th April there was a slight breach of this peg? Jordan has to face a media conference to explain!
  • #8,717
  • Jul 24, 2012 11:11am Jul 24, 2012 11:11am
I see the more serious case now and awaiting negative interest rate.
  • #8,718
  • Jul 24, 2012 11:32am Jul 24, 2012 11:32am
Quoting holmes
I see the more serious case now and awaiting negative interest rate.
Me too

But is it bad enough for the SNB
  • #8,719
  • Jul 24, 2012 11:42am Jul 24, 2012 11:42am
Quoting brinks
Me too

But is it bad enough for the SNB
Central banks are fundamental and everybody in EU now prefers to save in Switzerland, Cap control needed.
  • #8,720
  • Jul 24, 2012 3:09pm Jul 24, 2012 3:09pm
http://snbchf.com/2012/06/the-other-...yields-double/

This old article calls SNB's current policy a suicide:
http://snbchf.com/2012/06/a-central-...n-august-2011/

So if you say that giving up the peg is suicide and this article says that continuing the peg is suicide, then SNB committed suicide in the past already.

The end of pegging could come when the Year-on-Year inflation gets clean of the pegging artefact in Sept 2011. Then SNB may realise that they have an inflation, so it will be difficult to continue to print money as they do.
http://snbchf.com/2012/07/the-end-of...ese-deflation/
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