Diplomacy for sale

The Swiss are known to be slow. It took the Palais Fédéral a few months to acclimate to the new diplomacy and send – instead of Karin Keller-Suter, who could sometimes be irritating but would never kiss the ring – a handful of rich businessmen with arms full of gifts, ranging from Rolex watches to gold bars specifically curved for President Trump. And the magic worked. The Swiss export tariff was pulled from 39% to 15%.

Anything that’s for sale, the Swiss could buy. But make no mistake: at Friday’s apéro, the good news from the US tariffs was counterbalanced by the franc’s persistent strength. The strong franc sure sounds like a First World Problem – and it is – but it has concrete implications for businesses. While iPhones, toys, cars, and whatever else you can think of made outside Switzerland will be cheap for the Swiss this Christmas, it’s also hurting demand and costing jobs in Switzerland. Your Gruyère cheese could be the best in the world, but when it costs nearly $40 a kilo, it’s hard to digest.

This is why the SMI didn’t know how to react on Friday. It gapped lower at the open, then zigzagged up and down, but nothing suggested the clouds had cleared.

So what’s next? Can the Swiss franc appreciate indefinitely? The answer seems to be yes. The Swiss National Bank (SNB) cut rates to 0% this year, and the latest data suggest it has tried to intervene in FX markets by directly selling francs to weaken it. Nothing worked. From here, direct FX intervention seems more likely than another rate cut this year. There’s no guarantee the latter would reverse the franc’s appreciation. But in theory, the SNB can print as many francs as it wants and sell them. And the EURCHF is currently hovering around 0.92 – levels that usually bring the SNB into play.

And why is the franc so strong? Appetite for other currencies is weak. Even gold doesn’t offer much peace of mind in times of market turbulence. The US dollar is better bid this morning, as the US finally provides data for hungry investors to chew on. The probability of a 25bp Federal Reserve (Fed) cut in December has dropped to 43%, down from above 90% after the US government shutdown. And there’s now room for the doves to jump back on the wagon – but for that, Thursday’s jobs data should be soft enough to reverse the “no-cut” pricing. What counts as “soft enough”? Hard to say, as there are no forecasts yet for September. My analysis: we’ll see.

Last week ended slightly positive as dip-buyers jumped in before the closing bell, helping the S&P500 close above its 50-DMA. Nasdaq futures are leading gains this morning on hope that Nvidia will throw another set of strong results on the table this Wednesday, scaring the bears away. Jensen Huang sounds so confident the numbers won’t disappoint. But will investors keep buying? Possibly. Berkshire Hathaway reportedly built a new stake in Google, while Michael Burry closed his short positions and shuttered his fund. There may be more air to pump in.

Would improved appetite save Bitcoin? I don’t know. I rarely comment on Bitcoin – it rarely moves on anything tangible, and it annoys me. What’s clear is that momentum remains Bitcoin’s bigger trend – pointing at deeper losses. How deep? My Fibonacci retracement on the 2023–2025 rally suggests it could sink to around $82–83K without breaking the past two years’ bullish trend.

My guess is that, whatever happens to Bitcoin, the blockchain will thrive. If you missed the memo, JPMorgan has rolled out its own deposit token, JPM Coin, which – unlike Bitcoin, backed by thin air – represents US dollar deposits safely held at JPMorgan. Why is this cool? Because these tokens slash settlement times, boost liquidity, and let clients operate 24/7. Real-time, round-the-clock money movement… unlike the current system that shuts down on weekends like it’s 1998.

This is another giant domino falling toward the institutionalization of tokenized money. In ten years, it might not be Bitcoin that replaces money, but tokens quietly rewiring the entire financial system. And honestly? We’ll only be happy. One day, we’ll look back and say: “Remember when payments took two days and the system went to sleep on weekends? How absurd.”