Swiss Negative Rates Will Remain

Swiss Negative Rates Will Remain

Swissquote Ltd  | Feb 11, 2019 11:23

The Swiss economy remains robust and Swiss companies are optimistic, with order backlogs, stable employment and high capacity utilization.

Inflation was quiet in January, with headline consumer prices +0.60% and -0.30% in yearly and monthly terms. Overall prices advanced 0.50% annually (prior: 0.30%), the highest jump since August 2018.

Currently trading at 1.0027, USD/CHF is expected to head along 1.0030 short-term. We don’t see the Swiss National Bank putting an end to its negative interest rate policy for a while.

Indeed, the Swiss economy remains resilient while its main client, the EU, is facing severe downgrades in growth outlook. Italy’s central bank, for instance, recently slashed its GDP forecast for 2019 from 1% to 0.60%. The announcement caused the revolt of Italy’s coalition government, including leaders from Lega and Five Star Matteo Salvini and Luigi Di Maio, who condemned the statement and threatened to remove the bank’s independence.

Disclaimer: While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein. This document does not constitute a recommendation o sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investment.

Although every investment involves some degree of risk, the risk of loss trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make informed decisions prior to investing. The material presented here in not to be construed as trading advice or strategy. Swissquote Bank makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change. Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments.

By Vincent Mivelaz

Swissquote Ltd

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