SNB Surprises With Another Interest-Rate Cut

Swiss National Bank cut rates, we are down to 1.25%. The expectation was the rates would stay on hold, at least on the screen in front of me at 1.5. That has not happened. In terms of the commentary around this. Let's see what is happening because we are trying to work out the reasoning behind this. The expectation probably is that this is down to the fact that we have seen the Swiss francs strengthening, so we get an SNB policy cut to 1.25. It's getting into the habit, always been in the habits of delivering surprises. The Swiss National Bank says it is prepared to intervene in the currency markets if needed, but the first course of action seems to be a rate cut rather than that intervention that is perceived as being the best policy tool in order to deliver that. These 2024 growth targets of around 1% this is not exactly rip roaring growth 2025 one point 5%. But the take away and you can see it in the market reaction, Tom is a big move. The euro goes higher 125 the new rate sizable move in Swissy, Euro Swissy currently down 4/10 of percent close to 4/10 of percent on the back of that move. The big question as we were debating as to what extent that will continue given the political risk out of France. And we know that the strength that we've seen since around mid-May for the Swissy has been a challenge, up about 5% versus the euro year to date, though softer by a little under 2%. But currently you're seeing weakness coming through for the Swissy. And again, the question is to what extent that will be welcomed by officials presumably so over in Switland, to what extent that does continue?