Institutions suggest that silver may shift from shortage to surplus

(1) Last week, the Swiss franc saw a surge of several standard deviations, driven by an aggressive short squeeze triggered by French credit stress, which will force the market to reconsider using the Swiss franc as the preferred funding currency for carry trades. (2) This price movement serves as a reminder that Swiss franc crosses often face asymmetric risks, especially EUR/CHF, which typically rises slowly but can retreat sharply and rapidly during safe-haven flows, as was the case last week. (3) Since the demand for carry trades is unlikely to disappear, traders may turn to using the euro as an alternative funding currency to the Swiss franc, as the euro does not carry the same asymmetric risk. (4) Meanwhile, unfavorable terms of trade shocks in Europe continue to weigh on the euro, especially as winter approaches and inventories are at the lower end of their seasonal range, while energy costs remain elevated.

The German Ministry of Economic Affairs stated regarding energy reserves that Germany will participate in the further release of the reserve volume already determined by the International Energy Agency (IEA) in March. They are currently working on approving the release of energy reserves.

Tesla and SpaceX CEO Elon Musk said on Wednesday that his companies will be responsible for building and operating the Terafab artificial intelligence chip complex, and TSMC (TSM.US) will only be allowed to sublease a portion of the facility at most. Terafab is a joint project planned by Tesla and SpaceX in Texas, aiming to build a "gigafactory" for AI chip production. In response to rumors that "TSMC is most likely to own and operate the factory," Musk replied: "No, we will build and operate the factory, there is absolutely no doubt about that." He added that TSMC may sublease part of Terafab if they wish, "but that's all." Last week, Musk revealed that there had been discussions with TSMC about potential collaboration on the Terafab project but did not provide further details.

According to Nikkei News, Murata Manufacturing, located in Okayama, will increase production of ceramic materials used for electronic components. With growing demand for AI-related components, the company plans to invest about 9 billion yen to expand its production lines. Construction at the company’s headquarters factory is scheduled to begin in October, with the goal of starting operations in April 2028. The scale of the added production capacity has not been disclosed. The company’s ultra-fine, high-purity ceramic materials are widely used in products such as multilayer ceramic capacitors (MLCCs), and Murata Manufacturing holds the largest global market share in the MLCC sector.