Tag Archives: Swiss National Bank

Commentary will resume with a 2024 outlook on December 29. Overview: The dollar is trading with a firmer bias today ahead of the outcome of the FOMC meeting. Standing pat for two meetings was framed as a pause, but given the decline in price pressures, being unchanged for a third meeting is understood as the end of the historically aggressive tightening cycle. Fed Chair Powell is expected to express greater confidence that policy is sufficiently restrictive to bring...

Overview: The busy week of central bank meetings is off to a mostly slow start. The dollar is narrowly mixed in quiet turnover, except against the Japanese yen. Many participants seemed to exaggerate the risks of a BOJ move next week and dollar continued its recovery that began ahead of the weekend. Among emerging market currencies, central European currencies appear to be aided by the firmer euro. They are resisting the dollar's advance seen against most other...

On 1 December 2023, the Swiss National Bank – together with five Swiss and one German commercial bank – started a pilot project with central bank digital currency for financial institutions (wholesale central bank digital currency) on the regulated platform of SIX Digital Exchange (SDX). With this pilot, called Helvetia Phase III, the SNB will for the first time issue real wholesale CBDC in Swiss francs on a financial market infrastructure based on distributed ledger...

The strength of the Swiss franc (CHF) has been the topic of countless “expert” analyses for over a year and it has received considerable coverage in the mainstream financial press. In fact, the last time the currency garnered this much interest was probably in 2011, when its celebrated “safe haven” status backfired, as investors fled to it in droves and pushed the price to levels that forced the Swiss National Bank (SNB) to intervene and peg it to the euro....

The strength of the Swiss franc (CHF) has been the topic of countless “expert” analyses for over a year and it has received considerable coverage in the mainstream financial press. In fact, the last time the currency garnered this much interest was probably in 2011, when its celebrated “safe haven” status backfired, as investors fled to it in droves and pushed the price to levels that forced the Swiss National Bank (SNB) to intervene and peg it to the euro. Or perhaps it was when...

Echo der Zeit, SRF, 12 May 2023. HTML with link to audio file. Implications of capital injections and liquidity assistance for the federal government, the SNB, and Switzerland.

With its annual report from a few weeks ago the SNB communicated minor changes in its monetary policy strategy (p. 24): The review of the monetary policy strategy showed that it has fundamentally proved its worth. There was no need to adjust the first two elements, namely the definition of price stability and the conditional inflation forecast. The strategy has enabled the SNB to fulfil its mandate of price stability well, despite repeated strong external shocks in recent years. The...

Overview:  The dollar remains under pressure following the Federal Reserve's rate hike. The market thinks it heard that the Fed was done hiking, even though Fed Chair Powell held out the possibility that "some additional firming may be necessary."  The Norwegian krone is the strongest of the G10 currencies today, up more than 1%, spurred by a 25 bp hike and a commitment to do more. The Dollar Index briefly traded below 102.00 for the first time since February 3. A...

Neue Zürcher Zeitung, March 22, 2023. PDF. How to respond? Nationalization now rather than later? Breaking UBS up? Placing government representatives on the supervisory board? Illiquidity crises and the lender of last resort. Vollgeld, higher reserve requirements, and CBDC as partial solutions to TBTF problems.

Overview: The pendulum of market psychology is swinging dramatically. Amid the US banking crisis, Credit Suisse's long-running pressures percolated back to top-of-mind, sending ripples through the capital markets, trigging a sharp slide in the euro. The SNB support is helping the markets calm today. The odds of a 50 bp hike by the ECB today have been cut to about 50% compared with a nearly 100% a week ago. The market has about a 66% chance of a 25 bp hike by the Fed...