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The Swiss Franc Is Plunging After SNB Comments

Tyler Durden's picture




 

Following comments from the Swiss National Bank, reducing the group of sight deposit account holders that are exempt from negative interest rates, has sent Swissy tumbling...

 

The rush out of swiss francs reignites

 

As Bloomberg reports,

Swiss National Bank says its reduced the group of sight deposit account holders that are exempt from negative rates.

 

Says negative rates to apply to sight deposit accounts held at SNB by enterprises associated with federal govt, including pension fund PUBLICA.

 

Accounts will have minimum exemption threshold of CHF10m, to which negative interest does not apply.

 

Accounts of cantons of Geneva and Zurich, City of Zurich to be wound up.

 

Account of SNB pension fund will also be subject to negative rates.

 

Only sight deposit accounts to be exempt from negative interest will be those of central Federal Administration and the compensation funds for old age and survivors’ insurance, disability insurance and fund for loss of earned income.

*  *  *

One wonders if The SNB has licensed Sarao's "spoofing" algo... EURCHF weakness (+100pips to 1.036) seems to imply the SNB's hope is that Sight Deposits are reduced (as every central bank hopes... spend don't save)...

 

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Wed, 04/22/2015 - 08:36 | 6017544 cigarEngineer
cigarEngineer's picture

Jesus fkn christ if the swiss is plunging then that is a USD/CHF chart. Stop wasting my time.

Wed, 04/22/2015 - 08:38 | 6017549 buzzsaw99
buzzsaw99's picture

it "plunged" a whole penny. lulz

luv the sensational zh headlines

Wed, 04/22/2015 - 08:46 | 6017573 zvzzt
zvzzt's picture

Yes, fully agree. Now the move of January was a 'plunge'. Getting very annoying to read mvoes of a cent-2 cents here. 

Wed, 04/22/2015 - 08:41 | 6017559 SharkBit
SharkBit's picture

Exactly.  Always cracks me up how folks make shit up with respect to currency pairs.

Wed, 04/22/2015 - 08:43 | 6017562 VinceFostersGhost
VinceFostersGhost's picture

 

 

Crap vs crap.

 

It's all just paper to me.

Wed, 04/22/2015 - 08:57 | 6017613 LawsofPhysics
LawsofPhysics's picture

Bingo.  People are fucking idiots, devolution... 

tick tock motherfuckers....

Wed, 04/22/2015 - 08:58 | 6017616 Toolshed
Toolshed's picture

The chart shows the number of Swiss francs to the USD is increasing. Doesn't that indicate the value of the Swiss franc is decreasing?

Wed, 04/22/2015 - 09:15 | 6017693 LawsofPhysics
LawsofPhysics's picture

no, people selling dollars, dollar losing value.

Wed, 04/22/2015 - 11:37 | 6018250 Mountainview
Mountainview's picture

The Swiss are only interested in the EUR/CHF rate. The USD/CHF is a by-product as commerce with the US is small in comparison to Swiss Eu trade.

Wed, 04/22/2015 - 11:46 | 6018208 BrosephStiglitz
BrosephStiglitz's picture

It's a ratio, so it shows stronger Franc relative to the Dollar.  It says nothing about other currencies, or assets (they could both be weakening relative to everything else out there, but the Dollar would be weakening faster).  It really can be misleading to draw conclusions from just one chart.  You need to measure the overall strength (or conversely weakness) of both.

That is why there are indexes and why economists create "baskets" of goods when looking at price movements, with the basket being a sample.  The same would apply to currencies.

My advice is to not put too much stock in these types of articles.  ZH reports some things in a decent way, but not market moves.  Every week is a "crash" or a "break out", obviously this is not the case often.  Their causality is all screwy too: every sharp incline in a market, or decline is blamed on algorithms. You'd have to look at the nanosecond scale to evidence this.  It could just as easily be a choppy market with shorts getting squeezed, or a sell-off. 

In times of thin liquidity, for instance, banks (with volumes of proprietary data, including where stop-losses, or buy signals are clustered) will nudge the market a little to fire said executions and pick up commission.  Not necessarily a bunch of algorithms firing randomly to make the market look good for Zerohedge to post about.

Wed, 04/22/2015 - 14:47 | 6019122 Toolshed
Toolshed's picture

Thanks much for the info, but I still am confused. FX trading............it's not for everybody.

Wed, 04/22/2015 - 17:04 | 6019687 golden torch
golden torch's picture

I freelance over th? internet and earn about 80-85$ an hour. I was without a job for 7 months but last month my paycheck with big fat bonus was $15000 just working on my computer from my home for 5-6 hours. Here's what i have been doing... www.globe-report.com

Wed, 04/22/2015 - 08:41 | 6017546 buzzsaw99
buzzsaw99's picture

old days: pay you interest and give you a toaster

new days: take your money and no toaster 4 u

Wed, 04/22/2015 - 08:47 | 6017575 WillyGroper
WillyGroper's picture

new=put u in the toaster.

Wed, 04/22/2015 - 08:48 | 6017581 SoilMyselfRotten
SoilMyselfRotten's picture

Toaster not need, after giving them your money you ARE toast

Wed, 04/22/2015 - 08:37 | 6017547 Arius.
Arius.'s picture

what is the matter with the swiss ... why have become these cheesemakers so important to world finance?

Wed, 04/22/2015 - 08:40 | 6017555 buzzsaw99
buzzsaw99's picture

what they HAD was a stable currency and safe haven. now they have neither.

Wed, 04/22/2015 - 08:50 | 6017586 Ghordius
Ghordius's picture

but they aren't an informal member of the EUR team anymore

I mean... it must account for something. no? lol

Wed, 04/22/2015 - 09:07 | 6017652 Arius.
Arius.'s picture

yeah, i guess ... but also, they are old europe ... who cares, right?  all the power nowdays is in the US, or am i missing smt?

Wed, 04/22/2015 - 08:39 | 6017551 F22
F22's picture

Maybe it's just upside down...

Wed, 04/22/2015 - 08:44 | 6017563 LawsofPhysics
LawsofPhysics's picture

According to the data shown, it's actually the denominator that is "plunging" and that would be the dollar.

tick tock motherfuckers....

Wed, 04/22/2015 - 08:59 | 6017621 SmallerGovNow2
SmallerGovNow2's picture

LOP, how so?  Just asking...

US Dollar 98.19 -0.02

-0.02%

17:00

Wed, 04/22/2015 - 09:13 | 6017682 LawsofPhysics
LawsofPhysics's picture

Not very good at math I take it?  couple of points;

1) when the denominator gets smaller (even a little bit) the fraction gets larger.

2) relative to the CHF in the data shown, it's the dollar that decreased.

3) notice the pluging is in quotes, not really plunging in my book.  when the value goes to fucking zero, then I might say something "plunged".

Wed, 04/22/2015 - 13:01 | 6018567 gcjohns1971
gcjohns1971's picture

Did I miss something?

 

In the CHF/USD chart the Numerator ...CHF... is the number on the right side of the chart.

The Denominator...USD... is 1.

 

But you guys seem smart.  And I only glanced at the chart for a split second...so what did I miss?

Wed, 04/22/2015 - 20:55 | 6020441 PrettySkulls
PrettySkulls's picture

You missed that individual currencyies in pairs are called

Base / Quote

thus CHF/USD

is Swiss Francs, quoted in USD.

 

stocks are done the same way, its just that you dont see the second half of the pair, since it is implicit in the market.

AAPL (eg) could be wirtten AAPL/USD and thus it would be 1 apple stock quoted in USD

Wed, 04/22/2015 - 09:29 | 6017666 Platypus
Platypus's picture

Gosh!! Thats my third edit on this post!! The chart is indeed wrong. Bloomberg inverted the pair and forgot to invert the data. According to this " chf/usd" the base currency is appreciating which is wrong. The swissie is DEPRECIATING. Why those sons of a gun have to invert the freaking pair???

Wed, 04/22/2015 - 09:15 | 6017692 samjam7
samjam7's picture

Well stable is relative in times of QE at least SNB isn't trying to weaken the franc anymore by buying more corporate bonds. Anything to not bloat that balance sheet even more with useless paper. 

Wed, 04/22/2015 - 09:53 | 6017811 Omega_Man
Omega_Man's picture

I figured out that the US dollar is the antichrist..... maybe others are starting to catch on

Wed, 04/22/2015 - 10:06 | 6017863 basho
basho's picture

1 cent.

holy shit!

...............................

wait til the cantons hear this one.

jordan may be looking for a new job.

lmao

 

Wed, 04/22/2015 - 10:18 | 6017912 yogibear
yogibear's picture

These banksters  are telling people to buy assets by doing this.

They don't want your money.

When that game is over what's their next scheme?

 

Wed, 04/22/2015 - 10:33 | 6017975 New American Re...
New American Revolution's picture

??? wtf

Wed, 04/22/2015 - 10:47 | 6018026 jdtexas
jdtexas's picture

 

Those crafty Swiss will make Viktor some big bucks on the slide......ala George Soros

Russian Tycoon Viktor Vekselberg To Have Swiss Board Manage Global Assets

Wed, 04/22/2015 - 11:13 | 6018139 Iam Yue2
Iam Yue2's picture

Ok, so if we follow Grossian logic: people were buying negative-yield Swiss bonds, because they anticipated thatb the franc was going to continue to appreciate against other major currencies. Once again the SNB steps in, speculators get their fingers burnt, and the world and its mother should now all Sell Swiss bonds - the opportunity of a lifetime et al....

Wed, 04/22/2015 - 13:09 | 6018610 gcjohns1971
gcjohns1971's picture

I guess I don't understand what everyone finds so controversial.

They chose two charts that say the same thing...but are described in reverse terms.

They chose CHF/USD a.k.a...."How many CHF does it take to equal one dollar?"

(The answer is that it takes MORE CHF to equal a dollar.  Or CHF is LESS valuable than before.)

 

They chose EUR/CHF a.k.a. ... "How many EUROS does it take to make a CHF?"

(The answer is that it takes FEWER Euros to make a CHF,meaning the CHF is LESS valuable than before.)

 

Granted, if they wanted to be all nice and neat, they've have chosen CHF/USD & CHF/EUR  OR USD/CHF & EUR/CHF... to keep their denominators aligned.

 

So...what is the controversy?  The two charts say the same thing.  The only reason they point different directions is because the authors didn't use a common denominator between the two.

Wed, 04/22/2015 - 19:12 | 6020161 Dethrone The Ba...
Dethrone The Banksters's picture

I'm wondering the same thing

 

Perhaps it's just custom to display the FX graph a certain way to indicate which currency of the pair had the most action that day? 

 

Can anyone chime in lol 

 

btw been reading ZH forever but finally decided to start posting DOWN WITH BANKSTER SCUM

Wed, 04/22/2015 - 23:48 | 6020881 S.N.A.F.U.
S.N.A.F.U.'s picture

Look here (or see PrettySkulls's post above).

"CHF/USD = 0.96" means it takes 0.96 USD to buy 1 CHF.

When you see "CHF/USD" you should think "CHF priced in USD".

If (per the first chart in the article) a CHF used to cost (was quoted at) 0.951 USD but now costs 0.964 USD, that would mean the CHF gained value relative to the USD.

Thu, 04/23/2015 - 11:52 | 6022271 Dethrone The Ba...
Dethrone The Banksters's picture

thank you!

Thu, 04/23/2015 - 00:00 | 6020898 S.N.A.F.U.
S.N.A.F.U.'s picture

The two charts do not say the same thing at all.  The first one is backwards.

E.g., look here:

CHF/USD 1 week: http://www.xe.com/currencycharts/?from=CHF&to=USD&view=1W
EUR/CHF 1 year: http://www.xe.com/currencycharts/?from=EUR&to=CHF&view=1Y

You will find the 2nd linked chart aligns well with the 2nd chart in the ZH article.  The 1st linked chart does not align with the 1st chart in the ZH article, because the ZH one is backwards.  (Be mindful of the timescales of the two charts.)

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