Tag Archive: Swiss National Bank

Switzerland’s monetary policy: The three big misconceptions about the Swiss franc

2015-01-21

ON THURSDAY January 15th Switzerland’s central bank, the Swiss National Bank (SNB), removed the cap on its currency, which it had imposed over three years ago and reaffirmed only three days before its repeal. The doffing of the cap surprised and upset the foreign-exchange markets, hobbling several currency brokers, including Alpari (which happens to sponsor the London football team I support).

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The Economist explains: Why the Swiss unpegged the franc

2015-01-19

by The Economist

2015-01-19

IN THE world of central banking, slow and predictable decisions are the aim. So on January 15th, when the Swiss National Bank (SNB) suddenly announced that it would no longer hold the Swiss franc at a fixed exchange rate with the euro, there was panic. The franc soared. On Wednesday one euro was worth 1.2 Swiss francs; at one point on Thursday its value had fallen to just 0.85 francs.

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The liquidity monster and FXCM

2015-01-16

by Izabella Kaminska

2015-01-16

As we have already pointed out about Thursday’s unprecedented Swiss franc move following the SNB’s announcement about removing its 1.20 euro level floor and introducing a -0.75 per cent interest rate regime, the real story to pay attention to is what...

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What did the SNB do to EURCHF options markets?

2015-01-15

by Matthew C Klein

2015-01-15

The Swiss National Bank made G10 FX a lot more fun to watch today. One interesting thing is how the options markets responded. Via Jared Woodard of BGC, here’s a chart comparing the move in one-week implied volatility in the exchange rate between the...

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Central Europe and the Swiss franc: Currency risk

2015-01-15

by The Economist

2015-01-15

ANXIETY at the Swiss National Bank’s surprise decision today to drop its peg against the euro was nowhere more evident than in central Europe. The Swiss franc soared against all the region's currencies, including the euro, the Hungarian forint and especially the Polish zloty, and stock exchanges in Poland (pictured) and Hungary dropped sharply.

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The SNB and the Russia/oil connection

2015-01-15

by Izabella Kaminska

2015-01-15

A quick post to collate a few side theories on the reasons, justifications and consequences of the SNB move. Simon Derrick at BNY Mellon is first to point out that the euro floor/chf celing was leaving an open door to safe haven flows from Russia by ...

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Currencies: Going cuckoo for the Swiss

2015-01-15

by The Economist

2015-01-15

CURRENCIES don't normally move that far on a daily basis—2 to 3% is a big shift. The exception is when a country on a fixed exchange rate suffers a devaluation; then a 20-30% fall is a possibility. But a 20-30% plus upward move is almost unprecedented. That, however, is what happened to the Swiss franc on January 15th, as Switzerland's central bank abandoned its policy (instituted back in 2011) of capping the currency at Sfr1.20 to the euro.

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Vieles wird teurer doch das Deflationsgespenst bleibt am Leben

2015-01-01

by Markus M. Müller

2015-01-01

Die SNB wird nicht müde, uns vor der bösen Deflation zu warnen und die Inflationserwartungen tief zu halten: SNB: «Deflationsrisiken nochmals zugenommen» – Handelszeitung, 11.12.14 Mittelfristige Inflationserwartungen weiterhin tief und stabil – SNB,...

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Swiss Balance of Payments 2014, Q1-Q3 and Implications on CHF

We judge that negative or close to zero yielding government bonds reflect three points: Risk off environment, long-run currency gains on currency with low inflation, insufficient supply of government bonds for bank refinancing purposes.

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Setting monetary policy by popular vote: Full of holes

2014-11-27

by The Economist

2014-11-27

THE Swiss franc is a volatile currency that is fast becoming worthless. That, at least, is what some members of Switzerland’s right-wing People’s Party (SVP) would have you believe. Thanks to the SVP, Switzerland will vote on November 30th on a radical proposal to boost the central bank’s gold reserves. Bigger reserves, activists argue, will make the Swiss economy more stable and prosperous. In fact the opposite is true.

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Why was the gold price so low in 1999/2000?

To find further explanations as to why the gold price was weak in the late 1990s we analyze sector balances. Effectively private spending and private debt went in two different directions: a heavy increase in private spending and debt in the US against less growth in private spending and less debt in the rest of world. This combination fostered GDP growth in the US and weakened it in other countries. Real interest rates were positive. Markets...

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History of SNB Interventions

SNB Assets vs. Liabilities source UBS with EUR/CHF FX rate

High inflows of around 400 billion francs between 2009 and 2012 in the Swiss balance of payments could only be countered with an increase in reserve assets and interventions by the Swiss National Bank. This number is far higher than the one seen during the collapse of the Bretton Woods system, when the ten times bigger Germany had to buy reserves for 71 billion German Marks (at the time around 56 billion CHF). We look at the detailed history of...

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Weltwoche nimmt Blogbeitrag zu Gold von unbequemefragen.ch auf

2014-10-16

by Markus M. Müller

2014-10-16

Da habe ich nicht schlecht gestaunt, als sich Markus Schär von der Weltwoche vorgestern Abend bei mir über Twitter gemeldet und verkündet hat, dass er bei seinem Artikel über die Goldverkäufe der SNB sehr prominent meinen Blogbeitag zitiert. Nochmals...

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Swiss Gold Referendum and SNB’s Opinion: An Exchange of Arguments

Already in 2013, the Swiss National Bank (SNB) spoke out against the gold initiative and revealed that the Swiss gold is stored mostly in Switzerland and 20% in the UK and 10% in Canada. There is no Swiss gold in the United States according to SNB chairman Jordan. In this post we provide an exchange of Jordan's arguments against the ones of the gold initiative. We also state our view that is not as strict as the one of the referendum proponents.

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Bewiesen: Die SNB verkaufte Gold, welches bei der Fed gelagert war

2014-10-08

by Markus M. Müller

2014-10-08

Endlich kommt der Beweis für meine Vermutung! Die SNB hat heute – parallel zur Propaganda des Bundesrats – ein Dokument “Goldinitiative – häufig gestellte Fragen” (PDF) ins Netz gestellt und dabei sogar interessante Fakten preisgegeben. Konkret geht ...

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Will SNB FX Investments Yield Enough Until U.S. Inflation Starts?

Yield on Investment SNB Swiss National Bank

Will the SNB be able to survive an upturn in inflation: We focus on income and yields for foreign exchange position and gold and find out if the SNB makes enough income to survive a franc appreciation.

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When FX wars become negative interest wars

2014-08-27

by Izabella Kaminska

2014-08-27

Beat Siegenthaler, FX strategist at UBS, has been wondering about what the Swiss National Bank may do if the ECB’s measures to weaken the euro begin to test its 1.20 EURCHF floor. He notes, for example, that there has already been a marked divergence...

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Swiss Franc and Swiss Economy: The Overview Questions

pictet long-term graph eur/chf, real trade

Before the upcoming SNB monetary policy assessment meeting on June 19th, rumors started the SNB could follow the ECB and set negative rates on banks' excess reserves. We would like to deliver the whole background, starting with the question why Swiss inflation has been so low in the past and why CHF always appreciated.

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