Global Economic Intersection
Advertisement
  • Home
    • 카지노사이트
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
  • Home
    • 카지노사이트
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
Global Economic Intersection
No Result
View All Result

Zurich Turns the Euro into Swiss Cheese

admin by admin
January 16, 2015
in Uncategorized
0
0
SHARES
45
VIEWS
Share on FacebookShare on Twitter

But What will Happen to Switzerland?

Updated: 17 January 2015

Econintersect:  The Swiss National Bank shocked financial markets on Thursday by scrapping a three-year-old cap on the franc, sending the currency soaring against the euro. Reuters said “stocks were plunging on fears for the export-reliant Swiss economy.  Michael Haltman at GEI News (Switzerland Goes Further into Never-Never Land) had quotes from Clare O’Dea at SWI describing in detail how manufacturing, exporting and tourism in Switzerland would be hurt, but also pointing out that retail prices for the many imported products in Switzerland would be coming down.

swiss-franc-1000

Trade Summary for Switzerland

The Swiss have a relatively small balance of trade compared to the U.S., Germany and China, with latest data showing a trade surplus of nearly 4 CHF billion for the last month reported, November 2014.  This had been driven up from the 5-year average around 2 CHF billion by the weakening euro and the franc peg to that currency.  The trade surplus for Switzerland at 2 billion CHF is (+) 0.4% of total trade value (exports plus imports).  The corresponding number for the U.S. is (-) 9-10% and for Germany about (+) 10%.

swiss-bal-of-trade-2015-jan-16

The countries that Switzerland trades with and the products traded are shown in the following graphics.  Go to their source, The Observatory of Economic Complexity, for interactive graphics that show the data behind every tile by pointing with your cursor.

swiss-exports-countriesswiss-exports-key

 

swiss-imports-countriesswiss-imports-key

 

swiss-exports-products

 

swiss-imports-products

With the change of the exchange rate for CHF to the U.S. dollar changing by 15% (1.02 CHF for 1 $ to 0.87 CHF, the cost of Switzerland’s most recent annual oil and petroleum products imports which cost about 13.76 CHF billion would have been a little less than 12 CHK billion.  So there are some positives in the revaluation impacting the balance of trade.

Shaking up Forex

Primary effects (exchange with the Swiss franc) were generally large.  Some examples:  The U.S. dollar dropped about 15% against the franc, the euro about 16.7% and the yen about 12%.  Rates have bounced around after the initial reaction as shown in the following  charts.

EURUSD-2015-jan-15

The euro was originally down to $1.158 (-1.75%) has since come back to 1.1627 (-1.32%).  Both percentages are vs. the early am high of the day (15 January) at 1.1782.

A different kind of  uncertainty is seen in the USDCHF chart where a “flash crash” of 25% occurred right after the announcement but then the exchange trading quickly quieted down, although it was still much more volatile than before the revaluation announcement from Zurich.

USDCHF-2014-jan-15-16

Bottom Line

There will be some fallout but, except for traders going on heightened nerve alert for another currency market bombshell (like a Grexit – Greece exit from the euro – or a move to more freely floating Chinese yuan renminbi), the adjustments in the markets in general will probably be less traumatic than many were speculating several hours ago.  If the balance of trade were to go negative it would require that the fiscal balance that Switzerland has had at zero (neither deficit nor surplus) for the past two years would be forced into deficit to avoid a private sector monetary contraction.  (See Sectoral Balances.)  But it is not clear that a negative balance of trade will actually occur.  We’ll have to wait and see.

The Swiss Stock Exchange SMI Index declined 8.7% in the local currency, but that was an advance of more than 6% in U.S. dollar terms.  The intitial reaction must be considered positive.  If this price level holds for a few days the assessment must be that investors are endorsing the revaluation and are not expecting serious impacts on the Swiss economy.

The immediate reaction of the Swiss ETF (NYSE:EWL) was an advance of over 3% which was where EWL closed at the end of the day.  A reflex reaction that then holds at the end of a full day is likely an advance that can be trusted.  Relative strength for EWL will probably be positive in coming weeks because it should close with the SMI Index to some degree.

After a day with a lot of excitement maybe not so much has happened except maybe a period of outperformance for the Swiss market ETF.

For further explanation, read MacBeth Act 5, Scene 5, page 2.

If you prefer to read those who see much more in this than I do read:

  • End of CB Power – SNB Folds (Bruce Krasting, Zero Hedge)
  • ‘Francogeddon’: Swiss central bank stuns market with policy U-turn (Reuters, Sydney Morning Herald)
  • Francs, Fear and Folly (Paul Krugman, The New York Times)
  • Surprise Swiss move signals euro collapse (Simon Lee, The Standard – Hong Kong)
  • The Next Round of the Great Crisis as Begun (Phoenix Capital Research, Zero Hedge)

Update: 17 January 2015

The following comment discussion on this article occurred at Talk Markets:

swiss-cheese-comments-talk-markets

John Lounsbury

Sources:

  • Swiss central bank stuns market with policy U-turn (Alice Baghdjian and Silke Koltrowitz, Reuters, 15 January 2015)
  • Switzerland Goes Further into Never-Never Land (Michael Haltman, GEI News, 15 January 2015)
  • Learn More About Trade in Switzerland (Alexander Simoes, The Observatory of Economic Complexity,16 Janaury 2015)
  • Switzerland Balance of Trade (Trading Economics, 16 January 2015)

Previous Post

Market Commentary: Markets Open Up +0.3%, Slide To Unchanged, Currently Positive, Trending Further Down Expected

Next Post

Swiss Ten-Year Goes Negative

Related Posts

Unlocking the Future: Google's Game-Changing Move to Advertise NFT Games Starting September 15th
Business

Unlocking the Future: Google’s Game-Changing Move to Advertise NFT Games Starting September 15th

by John Wanguba
September 8, 2023
Bitcoin Is Finally Trading Perfectly Like 'Digital Gold'
Economics

Bitcoin Is Finally Trading Perfectly Like ‘Digital Gold’

by John Wanguba
August 5, 2023
Can Worldcoin Overtake Bitcoin?
Economics

Can Worldcoin Overtake Bitcoin?

by John Wanguba
August 4, 2023
Bitcoin Is Steady Above $29,000 Awaiting US NFP Figures
Economics

Bitcoin Is Steady Above $29,000 Awaiting US NFP Figures

by John Wanguba
August 4, 2023
Namibia Will Regulate And Not Ban Crypto With New Law
Finance

Namibia Will Regulate And Not Ban Crypto With New Law

by John Wanguba
July 25, 2023
Next Post

Swiss Ten-Year Goes Negative

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins bank banking banks Binance Bitcoin Bitcoin market blockchain BTC BTC price business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe Federal Reserve finance FTX inflation investment market analysis Metaverse NFT nonfungible tokens oil market price analysis recession regulation Russia stock market technology Tesla the UK the US Twitter

Archives

  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • August 2010
  • August 2009

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized
Global Economic Intersection

After nearly 11 years of 24/7/365 operation, Global Economic Intersection co-founders Steven Hansen and John Lounsbury are retiring. The new owner, a global media company in London, is in the process of completing the set-up of Global Economic Intersection files in their system and publishing platform. The official website ownership transfer took place on 24 August.

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Recent Posts

  • Unlocking the Future: Google’s Game-Changing Move to Advertise NFT Games Starting September 15th
  • Bitcoin Is Finally Trading Perfectly Like ‘Digital Gold’
  • Can Worldcoin Overtake Bitcoin?

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

No Result
View All Result
  • Home
  • Contact Us
  • Bitcoin Robot
    • Bitcoin Profit
    • Bitcoin Code
    • Quantum AI
    • eKrona Cryptocurrency
    • Bitcoin Up
    • Bitcoin Prime
    • Yuan Pay Group
    • Immediate Profit
    • BitIQ
    • Bitcoin Loophole
    • Crypto Boom
    • Bitcoin Era
    • Bitcoin Treasure
    • Bitcoin Lucro
    • Bitcoin System
    • Oil Profit
    • The News Spy
    • British Bitcoin Profit
    • Bitcoin Trader
  • Bitcoin Reddit

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.