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 Post subject: The Swiss blink first
PostPosted: Thu Jan 15, 2015 10:47 am 
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This is pretty huge:

http://www.reuters.com/article/2015/01/ ... XK20150115


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PostPosted: Fri Jan 16, 2015 1:21 pm 
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I don't get European central banks. If the past 10 years have shown us nothing, it is that the market needs central banks to signal intentions over a very broad timeline. You can't just change shit the day after you tell everyone you aren't changing shit. I just don't understand what the benefit to the Swiss was to change their peg overnight with no notice. Wouldn't it have been a far better move to simply raise the peg a little higher in response to the incoming Euro inflation, instead of removing the peg altogether overnight? Isn't it a central banks entire purpose of existence to keep the markets stable during periods of turmoil, and not to create their own?


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PostPosted: Fri Jan 16, 2015 3:27 pm 
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There is an ECB meeting next week regarding quantitative easing which is rumored to have triggered this decision by the Swiss so abruptly.


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PostPosted: Fri Jan 16, 2015 5:13 pm 
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Yes, but the ECB is doing the right thing and telegraphed that inflation is on the way for awhile now. Everyone knows what the result of that meeting will be. The Swiss knew this and as late as Monday said they were still pegging the franc to the Euro. Then boom, complete change of policy on Thursday. That is the exact opposite of how a central bank is supposed to behave. That's how you scare the shit out of the market.


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