USDCHF BUY
USD/CHF remains in positive territory despite a mixed risk profile in markets.
**Chinese Foreign Ministry spokesman Geng Shuang told a briefing on Wednesday that working out disagreements over trade was a "process of negotiation" and that China was not "avoiding problems".
**The Chinese reversal may give China hawks in the Trump administration, including Lighthizer, an opening to take a harder stance.
**Trump's tweets left no room for backing down, and Lighthizer made it clear that, despite continuing talks, "come Friday, there will be tariffs in place."
**The administration said the latest tariff escalation would take effect at 12:01 a.m. Friday (0401 GMT), hiking levees on Chinese products such as internet modems and routers, printed circuit boards, vacuum cleaners, and furniture.
USD Bullish:
1.High dollar hedging costs in a bond bull market.
2.Yield Curve inversion sparked by the dismal EMU flash PMI.
3. The decline in US rates could benefit housing prices.
4.Mood shifting towards one of secular stagnation.
5. Foreign banks deprived access to US dollars
6. Change in rate circumstances unlikely to diminish the dollar’s strength.
7.A bearish re-steepening of the Treasury curve.
8. January US non-farm payrolls alleviate US economic slowdown concerns.
9. Reserve dynamics link a strong dollar to heightened financial tensions.
10.Not enough affirmation in the Fed statement that the hike cycle is pausing.
11. Fiscal stimulus is more an economic driver than a USD weakened.
12.Higher three-month cross-currency basis swaps.
13. Strength of the US dollar relies on perception.
USD Bearish:
1.Citigroup's surprise index lowest since mid-2017.
2.US consumer to move into a defensive position.
3.Fed shifts from hiking rates to a data-dependent outlook.
4. With the economic slowdown, less tightening is needed.
5. The tax package did not stimulate or spark a boom in business investment.
6. Rate-sensitive sectors like housing are rolling over.
7. Powell's comments did not have a dramatic impact on market expectations.
8. Fed’s “gradual pace” rate hikes may soon come to an end.
9. Greenback has become a “risk” currency due to its higher yield.
10. Democrats win control of the House.
11. Democrats win big in the House and Senate.
12.Erosion of Fed independence under Trump's remarks.
13.US administration wants to see the US Dollar weaker.
CHF Bullish:
1. Swiss economy remains remarkably robust
2. Global financial stress increases significantly
3. Fitch affirms Switzerland at 'AAA' outlook stable.
4.One of the world’s premier safe-haven assets.
5. With the renewed float of the Swiss currency, it could attract serious safe-haven flows.
6. The Swiss franc is currently at an extreme net short position.
7.CHF rises in response to political turmoil in Italy.
8. The net speculative short position in Swiss Francs is the largest since 2007.
9. Swiss vote on a fundamental monetary reform would limit the creation of CHF.
10. The Swiss National Bank reported a substantial loss for the first quarter of 2018.
11.Swiss National Bank (SNB) president not in a hurry to intervene.
12. It will be very hard for the SNB to fight against intense safety-demand for the Franc.
13. The yen is not the ideal harbor for investors willing to avoid the N. Korean tensions.
CHF Bearish:
1.Insurers and pension funds above the norm exposure to the property market
2. Swiss economy suffering from the rise in geopolitical uncertainty.
3.CHF has not reacted strongly to the sell-off in EM.
4.Record net short position in the Swiss franc.
5.A growing negative carry trade against the buck.
6. The ECB's pledges do not require the SNB to follow with its own rate hikes.
7. The SNB pledged to intervene in foreign exchange markets from time to time to weaken the franc.
8. The Swiss National Bank is seen raising rates, not before Q3 2019.
9. Since the SNB maintains the use of FX intervention, investors may prefer the JPY as a safe haven.
10. A sovereign money system would not eliminate the risk of instability.
11. Chairman of the Governing Board of the SNB says negative rates and interventions are still essential.
12. The factors that led to the abandonment of the peg are reversing.
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