Theres no need for intervention. Market will form a support itself at 1.20 -if the price someday goes that low, which i doubt-, SNB doesn't really need to do anything. Just in case things go really insane they might do something; but things don't look like.
- #11,623
- Edited 11:48am Mar 16, 2014 8:21am | Edited 11:48am
Muppets. When completely ignorant to the underlying macro you can’t afford to have strong opinions.
The SNB is not going to raise the floor or impose negative rates. Officials are just jawboning.
Keep in mind that a central bank is supposed to be ahead of the curve. Germany is Switzerland’s largest trade partner. The SNB will most likely remove the floor before these two inflation rates have converged.
There’s also some trade with France and Italy which are experiencing lower inflation than Germany. M2 and M3 in Switzerland are growing close to 10% annually.
SVME PMI and KOF economic barometer data are signaling that above-trend growth is in the pipeline which will increase inflationary pressures. Same with immigration quotas thru wages, but that’s further into the future.
It’s time to pay attention when every investment bank on the street says EUR/CHF should be bought.
the Swiss franc has always been overvalued based on PPP even if you adjust for productivity differences. If it were too expensive the country wouldn’t be able to rack up CA/GDP surpluses exceeding 10% year after year.
The SNB is not going to raise the floor or impose negative rates. Officials are just jawboning.
Keep in mind that a central bank is supposed to be ahead of the curve. Germany is Switzerland’s largest trade partner. The SNB will most likely remove the floor before these two inflation rates have converged.
There’s also some trade with France and Italy which are experiencing lower inflation than Germany. M2 and M3 in Switzerland are growing close to 10% annually.
SVME PMI and KOF economic barometer data are signaling that above-trend growth is in the pipeline which will increase inflationary pressures. Same with immigration quotas thru wages, but that’s further into the future.
It’s time to pay attention when every investment bank on the street says EUR/CHF should be bought.
the Swiss franc has always been overvalued based on PPP even if you adjust for productivity differences. If it were too expensive the country wouldn’t be able to rack up CA/GDP surpluses exceeding 10% year after year.
Twitter - @Jimbaloo
- #11,628
- Mar 17, 2014 2:26am Mar 17, 2014 2:26am
Added another Heavy Long yesterday at 1.2135, to my 1.2127 Heavy Long for a late 1.2190s or around 1.2200 TP.
Would find EC today at 1.2160s or more, around 1.2200 would be tough to break before FOMC and SNB 3 days to come.
Don't think 1.21 would be broken or even tested before then.
EC would stay above 1.2020 anyway, bullish movement up 1.2200 would be to 1.2240s-50s, up there to open for 1.2370s.
Nice to see a M*r*n wanting to impress by posting some charts showing price growth and its converge bt. Switzerland and Germany.
Not a bad attempt but was better to prove how and when price will converge when he's too sure SNB will remove the floor.
Supposedly, the chart idea is right, who said or can prove even in a small % that the curves will come close anytime soon
It can stay moving sideways for many months or years with little ups and downs.
Also, what M*r*n said that when the curves meet by then EC would not be at 1.25-1.30 or more?, at that time EC Bulls would not be affected by any floor remove.
Got it Jimbo Mimbo Bimbo
Would find EC today at 1.2160s or more, around 1.2200 would be tough to break before FOMC and SNB 3 days to come.
Don't think 1.21 would be broken or even tested before then.
EC would stay above 1.2020 anyway, bullish movement up 1.2200 would be to 1.2240s-50s, up there to open for 1.2370s.
Nice to see a M*r*n wanting to impress by posting some charts showing price growth and its converge bt. Switzerland and Germany.
Not a bad attempt but was better to prove how and when price will converge when he's too sure SNB will remove the floor.
Supposedly, the chart idea is right, who said or can prove even in a small % that the curves will come close anytime soon
It can stay moving sideways for many months or years with little ups and downs.
Also, what M*r*n said that when the curves meet by then EC would not be at 1.25-1.30 or more?, at that time EC Bulls would not be affected by any floor remove.
Got it Jimbo Mimbo Bimbo
Trade according to current market condition, not what you think would be.
- #11,631
- Edited 1:52pm Mar 19, 2014 1:25pm | Edited 1:52pm
EUR/USD has become a bit pricey. I suspect the main reasons for euro’s resilience are:
1) real yields have declined considerably less than nominal ones
2) Fed is still intervening on a massive scale and artificially lowering term premiums
3) growth and optimism is recovering which results in capital inflows. In this regard QE might also be suppressing USD because global investors fear an exit will result in higher discount rates in all asset classes
4) safe haven premium: the only G3 net creditor currency and with a neutral CB
No EUR/CHF forecasts were given in my previous post.
My impression is that Swissy is mainly priced off the euro. I haven’t bothered to check what the exact figure is but I believe this is where most of the capital goes and almost 50% of exports.
From SNB's February statistical bulletin: real exchange rates
If only considering the respective yield curves my model tells me that EUR/CHF is currently 3-4% overvalued. J.Clinton has wet dreams about 1.30 but that level is unrealistic unless EZ core yields rises substantially which is unlikely because Europe is a younger version of Japan. Of course there’s also trade to consider, but capital trumps trade.
I expect the floor to be removed mid-2015. The sovereign debt crisis has passed so the extreme volatility is unlikely to return.
I get nothing in return for educating you lot so this will be my last post.
wrt. Dorgan, I follow his blog via RSS. Has brought a lot of insights.
1) real yields have declined considerably less than nominal ones
2) Fed is still intervening on a massive scale and artificially lowering term premiums
3) growth and optimism is recovering which results in capital inflows. In this regard QE might also be suppressing USD because global investors fear an exit will result in higher discount rates in all asset classes
4) safe haven premium: the only G3 net creditor currency and with a neutral CB
No EUR/CHF forecasts were given in my previous post.
My impression is that Swissy is mainly priced off the euro. I haven’t bothered to check what the exact figure is but I believe this is where most of the capital goes and almost 50% of exports.
From SNB's February statistical bulletin: real exchange rates
If only considering the respective yield curves my model tells me that EUR/CHF is currently 3-4% overvalued. J.Clinton has wet dreams about 1.30 but that level is unrealistic unless EZ core yields rises substantially which is unlikely because Europe is a younger version of Japan. Of course there’s also trade to consider, but capital trumps trade.
I expect the floor to be removed mid-2015. The sovereign debt crisis has passed so the extreme volatility is unlikely to return.
I get nothing in return for educating you lot so this will be my last post.
wrt. Dorgan, I follow his blog via RSS. Has brought a lot of insights.
Twitter - @Jimbaloo
- #11,636
- Mar 20, 2014 2:38pm Mar 20, 2014 2:38pm
Exited both my long positions on EC as was decided. 1.2200 new tough resistance not easy to form a bullish formation starting from, with all economical political difficult period. However, from 1.2200 to under 1.2220 is a resistance zone followed by 1.2250s. Waiting for another drop down to 1.2110s-1.2120s to long again.
jimbo mimbo want to educate us when his mind can't remember the first sentence of a post like this one: "Added another Heavy Long yesterday at 1.2135, to my 1.2127 Heavy Long for a late 1.2190s or around 1.2200 TP". to blindly say 1.30 wet dreams nonsense bimbo hadn't even show us some entry/exit levels to compare with what market would do, to lighten us about his Forex knowledge (or education lets say
)
Look dear boy, all the useless charts you posted mean nothing in market trading. ECB debt crisis that would not end, low interest rate and Fed tapering to soon rate hike hadn't yet teach you that even the main fundamentals sometimes have no big impact on the market. What would it effect when just comparing countries inflation, price growth, core cpi, ppi and whatever. Hadn't you even learn from all the CHF bad economical data but the currency keeps on strengthening!!! Floor Traders have more influence than all your ... and "dog Rss".
The market is more complicated than anything, said it before that Fed raise of interest rate may find EU 1.40-1.45 while QE may find it 1.25-1.30, it can be sometimes like this, sometimes like that(Sometime Good news bad for dollar or sometimes bad news bad for dollar).
Nothing will show you right indications of market movement other than charts PA and pure technical stuff that will indicate when the market decides to reversal and when to continue.
Start trading the market in REAL to understand what am talking about instead of staying confined in your theoretical charts that leads to an end high wall.
jimbo mimbo want to educate us when his mind can't remember the first sentence of a post like this one: "Added another Heavy Long yesterday at 1.2135, to my 1.2127 Heavy Long for a late 1.2190s or around 1.2200 TP". to blindly say 1.30 wet dreams nonsense
bimbo hadn't even show us some entry/exit levels to compare with what market would do, to lighten us about his Forex knowledge (or education lets say)Look dear boy, all the useless charts you posted mean nothing in market trading. ECB debt crisis that would not end, low interest rate and Fed tapering to soon rate hike hadn't yet teach you that even the main fundamentals sometimes have no big impact on the market. What would it effect when just comparing countries inflation, price growth, core cpi, ppi and whatever. Hadn't you even learn from all the CHF bad economical data but the currency keeps on strengthening!!! Floor Traders have more influence than all your ... and "dog Rss".
The market is more complicated than anything, said it before that Fed raise of interest rate may find EU 1.40-1.45 while QE may find it 1.25-1.30, it can be sometimes like this, sometimes like that(Sometime Good news bad for dollar or sometimes bad news bad for dollar).
Nothing will show you right indications of market movement other than charts PA and pure technical stuff that will indicate when the market decides to reversal and when to continue.
Start trading the market in REAL to understand what am talking about instead of staying confined in your theoretical charts that leads to an end high wall
.
Trade according to current market condition, not what you think would be.
- #11,640
- Edited Mar 22, 2014 11:02am Mar 21, 2014 2:32pm | Edited Mar 22, 2014 11:02am
- | Joined Oct 2011 | Status: Trader | 1,247 Posts