Tag Archive: PPP

Macro: Tell Us Something We Don’t Already Know

2022-09-24

As September winds down, three sets of economic reports will draw the most attention. We will review them and then offer a snapshot of the emerging market central bank meetings.

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Macro and Prices: Sentiment Swings Between Inflation and Recession

2022-05-14

by Marc Chandler

2022-05-14

(On vacation for the rest of the month. Going to Portugal. Commentary will resume on June 1. Good luck to us all.) The market is a fickle mistress. The major central banks were judged to be behind the inflation curve.

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Great Graphic: Euro’s (OECD) PPP

2019-06-12

by Marc Chandler

2019-06-12

US President Trump recently bemoaned the fact that the euro is undervalued. While his critics complain that he is prone to exaggeration, in this case, the euro is undervalued. This Great Graphic a 30-year chart of the euro has moved around its purchasing power parity as measured by the OECD. Currently, the euro is about 22% undervalued, and it has been cheap to PPP since for the past five years.

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The Better Way: Backing into Smoot-Hawley and Repeating the Flaws of PPP

2017-01-10

by Marc Chandler

2017-01-10

Part of the US Republican tax reforms call for a border adjustment. It will tax imports fully and not exports. This will likely be challenged at the WTO. Many economists say the dollar will automatically appreciate by 20%. WE are bullish the dollar but skeptical of the logic here.

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(2) FX Theory: Purchasing Power Parity

An economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power.

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(2.1) OECD Purchasing Power Parity Index

The OECD purchasing power parity compares consumption prices in different countries.

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Swiss Exports Rise Thanks to Higher Export Prices. Sorry, What ????

2012-10-22

by George Dorgan

2012-10-22

Or how Swiss exporters are able to widen their margins thanks to the SNB currency manipulation Last week the Swiss export data for the third quarter was released. The news agency report was simple: Exports from Switzerland fell by a real 8.0 percent in September to 16.49 billion Swiss francs ($17.87 billion), the Federal …

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EUR/CHF, Market betting on Floor Hike, December 2011

2011-12-31

by George Dorgan

2011-12-31

Four Trades For 2012: #2 Sell The Swiss Franc I bought EUR/CHF shortly after the 1.20 peg was introduced and have held it ever since. My only regret has not been trading the range more aggressively. At this point everyone has an opinion of the SNB so I won’t try to convince the bears. Personally, … Continue reading »

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