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EUR/CHF

  • #12,201
  • Sep 5, 2014 6:40am Sep 5, 2014 6:40am
quoting ETH-Report: https://www.tradingfloor.com/posts/t...-steen-1507937
for those speaking german/SNB-Jordan interview from last weekend: http://www.nzz.ch/wirtschaft/das-umf...ert-1.18373988
  • #12,202
  • Sep 5, 2014 7:44am Sep 5, 2014 7:44am
Quoting Swissie
quoting ETH-Report: https://www.tradingfloor.com/posts/t...-steen-1507937 for those speaking german/SNB-Jordan interview from last weekend: http://www.nzz.ch/wirtschaft/das-umf...ert-1.18373988
For me it sounds like its more likely the SNB will rise up the floor to 1,25 or higher than give up the peg.
  • #12,203
  • Sep 5, 2014 7:48am Sep 5, 2014 7:48am
So we get rubbish NFP and ec goes up past 1.2070?!
  • #12,204
  • Sep 5, 2014 8:07am Sep 5, 2014 8:07am
Quoting Napoleon180
{quote} For me it sounds like its more likely the SNB will rise up the floor to 1,25 or higher than give up the peg.
It's now 2 years we hear this story...
Why would they raise it to 1.25 ? To allow you to get out of your positions in profit ?
And why not rather lower it to 1.15 to crush everybody ?

"To a question on whether the SNB might shift the cap on the currency -- for example to 1.25 per euro -- he repeated previous comments that the SNB wasn’t in the business of “fine tuning.”"
For me, that's clear enough: 1.25 ? => *NO* !

http://www.bloomberg.com/news/2014-0...s-reports.html
  • #12,205
  • Sep 5, 2014 8:13am Sep 5, 2014 8:13am
Even though I'm super bullish on ec I think the chance of a rise in the peg is close to ZERO
  • #12,206
  • Sep 5, 2014 8:44am Sep 5, 2014 8:44am
Quoting Mevo
{quote} It's now 2 years we hear this story... Why would they raise it to 1.25 ? To allow you to get out of your positions in profit ? And why not rather lower it to 1.15 to crush everybody ? "To a question on whether the SNB might shift the cap on the currency -- for example to 1.25 per euro -- he repeated previous comments that the SNB wasn’t in the business of “fine tuning.”" For me, that's clear enough: 1.25 ? => *NO* ! http://www.bloomberg.com/news/2014-0...s-reports.html
Also just your opinion you bring on here for ages. For me things are different. Accept it. You might short EC, good luck.
The SNB does not care if we trader get a profit or does'nt want to crush somebody, it#s just : what is the best for their economy. And based on this question, in my opinion they will react soon and we will not go further down to 1,2000.
  • #12,207
  • Sep 5, 2014 8:52am Sep 5, 2014 8:52am
Quoting Napoleon180
{quote} Also just your opinion you bring on here for ages. For me things are different. Accept it. You might short EC, good luck. The SNB does not care if we trader get a profit or does'nt want to crush somebody, it#s just : what is the best for their economy. And based on this question, in my opinion they will react soon and we will not go further down to 1,2000.
Please.
If you read a little what I wrote, you would know I'm long more than 20 lots, and like many, I'm getting hurt.
As I said, now I'm in with a floating loss, I stay in, but I regret this position, especially since I got out of E/C earlier.
I won't add to my position anymore should it go further down, and I invite everybody to be careful about longing EC.

That's only my opinion, but to me, you seem like many here: You don't make the difference beetween your hopes and the reality.
Isn't the statement of the SNB clear enough for you ? And it's only a few days old.
If not, continue to hope for a raise of the floor to 1.25
  • #12,208
  • Sep 5, 2014 9:31am Sep 5, 2014 9:31am
Quoting JamesCaan
Even though I'm super bullish on ec I think the chance of a rise in the peg is close to ZERO
James why are you super bullish on ec?
  • #12,209
  • Sep 5, 2014 1:05pm Sep 5, 2014 1:05pm
Surprisingly many seem to accept what the SNB says in media at face value.

It has little to gain by signaling changes to the FX floor in advance.

In today's market, where equity multiples already seem stretched and bond yields far up the curve are below long-run inflation rates, it really doesn't make sense to increase currency reserves unnecessarily. And those reserves will obviously be devalued when the Swiss franc makes the next big leap.
Twitter - @Jimbaloo
  • #12,210
  • Sep 6, 2014 4:24pm Sep 6, 2014 4:24pm
Everyone likes to say follow the smart money. I think the smart money is short or was short. Sure we had a small rise before it started this down trend but it wasn't significant. Was that from all the shorts unwinding? Is this downtrend just the effects of global events or more shorts. Shorting here has limited potential but that doesn't mean buy. Or does shorting have limited potential. If the snb holds the 1.2 floor now who's to say it won't lower it in the future? What will happen if they stop defending the 1.2 floor. Will they keep doing it forever?
  • #12,211
  • Sep 7, 2014 3:29am Sep 7, 2014 3:29am
Quoting Lover Man
Everyone likes to say follow the smart money. I think the smart money is short or was short. Sure we had a small rise before it started this down trend but it wasn't significant. Was that from all the shorts unwinding? Is this downtrend just the effects of global events or more shorts. Shorting here has limited potential but that doesn't mean buy. Or does shorting have limited potential. If the snb holds the 1.2 floor now who's to say it won't lower it in the future? What will happen if they stop defending the 1.2 floor. Will they keep doing it...
I think a lot of the so-called "smart money" exchanged EUROs (and other currencies) for CHFs. They didn't just open a short trade.The difference is that it's not a position they are going to unwind like speculators. Speculators, like ourselves close their position in profit, and push again E/C down by doing this.

So I guess it's not a question of "shorting", it's a question of people prefering to put their money in CHF to hold it.

About the SNB, there's a pretty interesting thing: When they defend the 1.20 floor, they create CHF to buy EUROS they then reinvest in EURO governement bonds. By doing this, when the EUR/CHF pair goes up, it makes their EURO reserves more valuable, which strenghtens the CHF !!! So the long term effect is that the EUR/CHF will be totally fixed at 1.20, unless the SNB does something to take some kind of loss (give away free money to Swiss citizens for example ?). It's somewhere crazy, as their actual problem is they are "too good" at managing their currency which makes it too valuable.
  • #12,212
  • Edited 11:34pm Sep 7, 2014 10:22pm | Edited 11:34pm
The SNB doesn't have to buy Euros to flood the the market with CHF. They can buy USD, CAD, JPY or whatever they feel like even gold to increase their reserves.

The likelihood of them raising the peg to 1.25 is extremely remote. The reason is if they do then speculators will the attack 1.25 and they will have to raise to 1.30 and so on and so on..... Obviously they don't want to do that.

I assume that they have already thought through all the scenarios and how they would eventually exit the peg. The SNB is very transparent abut its currency reserves so if they are doing any major changes it will be reported. Most likely the currency will resemble what USD/HKD looks like, basically a flat line. Everyone thinks the SNB will come in with some massive move. They really don't have to do anything till it gets to 1.20 and when it does they can push it up to 1.205 then let it fall to 1.20 and repeat a push back up a couple pips. Just like they did from Jan 2012-Jan 2013. Ia m not sure why people think the SNB needs to push it up hundreds of pips, HK doesn't do that with their peg, they push it just high enough to maintain the peg.
  • #12,213
  • Sep 8, 2014 3:52am Sep 8, 2014 3:52am
Quoting Sherpa
The SNB doesn't have to buy Euros to flood the the market with CHF
They have to when they are defending the E/C floor.

Quote
They really don't have to do anything till it gets to 1.20 and when it does they can push it up to 1.205 then let it fall to 1.20 and repeat a push back up a couple pips. Just like they did from Jan 2012-Jan 2013. Ia m not sure why people think the SNB needs to push it up hundreds of pips, HK doesn't do that with their peg, they push it just high enough to maintain the peg.

The SNB does NOT "push" the price, and never did that in the past to defend the FLOOR.
They just post massive limit BUY orders at 1.20 on major markets like the futures market and EBS. If you look there, when approching the floor, you see their orders at 1.20. They do nothing more.
  • #12,214
  • Sep 8, 2014 8:37am Sep 8, 2014 8:37am
and here it is, saxobank changed margin requirements on EC just 8%, my went to 91% utilization,
congratulation to my honest broker ​
  • #12,215
  • Sep 8, 2014 9:38am Sep 8, 2014 9:38am
Quoting Mevo
{quote} They have to when they are defending the E/C floor. {quote} The SNB does NOT "push" the price, and never did that in the past to defend the FLOOR. They just post massive limit BUY orders at 1.20 on major markets like the futures market and EBS. If you look there, when approching the floor, you see their orders at 1.20. They do nothing more.
sure they buy EURCHF at first but then they switch them 1:1 into other currencies if they want. I.E. sell EURUSD etc. At the end, they have USD but initially bought EURCHF. So another reason to hold USDCHF longs as well! ;-)

On negative interest rates: a few posts ago, someone said, that negative interest rates would lead to swiss companies withdrawing their money from swiss banks? why should they? would this be the start of a boom for pillow producers? I can't see why they should withdraw their money. Also i still see the question of how a negative interest rate would be applied in CH.

PS: I don't like todays CPI-Figures
  • #12,216
  • Sep 8, 2014 9:44am Sep 8, 2014 9:44am
any one know what is upside target for EURCHF ? if the start interven then how much price will go up? any idea
ny o
Trading by EA
  • #12,217
  • Sep 8, 2014 9:46am Sep 8, 2014 9:46am
Quoting mmudasir
any one know what is upside target for EURCHF ? if the start interven then how much price will go up? any idea ny o
2 pips

1.2065
  • #12,218
  • Sep 8, 2014 9:51am Sep 8, 2014 9:51am
Quoting Swissie
{quote} sure they buy EURCHF at first but then they switch them 1:1 into other currencies if they want. I.E. sell EURUSD etc. At the end, they have USD but initially bought EURCHF. So another reason to hold USDCHF longs as well! ;-)
This way, Ok.

Quote
On negative interest rates: a few posts ago, someone said, that negative interest rates would lead to swiss companies withdrawing their money from swiss banks? why should they? would this be the start of a boom for pillow producers? I can't see why they should withdraw their money. Also i still see the question of how a negative interest rate would be applied in CH. PS: I don't like todays CPI-Figures

You could bet on pillow producers for individuals, not companies.
But you should probably more bet on safe deposits installation/maintenance companies and especially paper producers and the companies related to printing for the SNB.

Why ? You are ready to pay the banks for the privilege of lending them your money (at a fee for YOU !) ?
I knew Swiss people were nice, but not that nice !

Rent a safe deposit at the bank for a small fixed annual fee and put big bills in it for all non needed money. When you need it, you just have to deposit it back.
It's not that simple, I admit. Banks will raise safe deposit boxes rents, put fees on cash deposits and/or withdrawal and so on. (If you may be nice, they are not...)
  • #12,219
  • Sep 8, 2014 10:07am Sep 8, 2014 10:07am
What is the alternative to leaving the money at the bank? what if they need financing from the bank for i.e. further investments? Do you think the bank would appreciate to see you putting your money into a deposit box? Why are you sure, that individuals would have to pay the negative interest? Couldn't it just be for "non swiss customers"? Or would this be against the anti-rassism-norm? ;-)

I think after renting a deposit box, you can deposit whatever you want, without letting the bank know what you store... but i'm not 100 % sure at that point.
  • #12,220
  • Edited 10:52am Sep 8, 2014 10:28am | Edited 10:52am
Quoting Swissie
What is the alternative to leaving the money at the bank? what if they need financing from the bank for i.e. further investments? Do you think the bank would appreciate to see you putting your money into a deposit box? Why are you sure, that individuals would have to pay the negative interest? Couldn't it just be for "non swiss customers"? Or would this be against the anti-rassism-norm? ;-) I think after renting a deposit box, you can deposit whatever you want, without letting the bank know what you store... but i'm not 100 % sure at that point....
I don't exacty understand what you mean.
The alternative to leave money at the bank ? CHF in our case ? Convert it to another currency which does not have the negative interest rate (even at your swiss bank), buy precious metal or another store of value, or if you want to keep CHF to be sure to not have any profit/loss risk: Withdraw it in CASH (CHF bills).

We are talking of money you don't need. All the extra cash all people/companies have on their bank account. You have to keep the minimum to run your business or pay your regular expenses as an individual (what you cannot pay in cash. You can arrange yourself to pay your monthly rent in cash if the owner of your apartment lives near you and accepts for example). You stop using credit cards and start to pay cash at the grocery store too, and so on.

"The bank would APRECIATE" ??? That's amazing to read something like this ! Because you think customers would apreciate PAYING an interest to leave money at the bank ? And who cares ? Are you working in the banking industry or what ? Is your banker your best friend ?

I am not sure of anything ! We were only discussing of the EVENTUALITY of NEGATIVE interst rates. And what negative interest rates mean is having to PAY an interest for the money you have at a bank. About "individuals / non swiss people, etc ..." read my previous posts, it was what I was talking about, it's complicated to select who it would affect or not.

But, the SNB talked in the past that they do NOT want to put negative interest rates in place, and my posts were exactly about all the problems that would occur !!! It only was an answer to someone talking of this and what were the solutions to make CHF go down.

Euhh... All non-swiss are another race, lol ? But it would mean have different prices and policies according to citizenship or residence, which is the opposite of the current way to do these days.

Of course you can put what you want (but it has to respect the bank policies, there are banned items, like explosives ) in a safe without telling anybody. And you are not obliged to rent a safe at a bank, you have some non bank business renting insured safes...

EDIT: About the financing thing, if you need financing, it's probably you don't have the money, no ? And when a bank finance you something they usually take this something in garanty, it has little to do with the cash you have on your bank account.
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