Mike “Mish” Shedlock's
Sitka Pacific Capital Management,Llc
The Swiss national bank is not happy with appreciation of the Frank. Its solution is likely another rate cut to -1.0%.
Bloomberg reports SNB Likely to Follow Interventions With Interest-Rate Cut.
The Swiss National Bank may have to do more than pump billions into foreign exchange markets into prevent the franc from appreciating to a damaging level.
With data suggesting the central bank recently intervened after the currency rose to the highest since 2017 against the euro, an increasing number of economists also expect the SNB to reduce its benchmark interest rate. Five respondents of 17 in Bloomberg’s monthly survey now see a cut of up to 25 basis points this quarter, compared with just one in July.
With the franc up more than 4% versus the euro in the past three months and the European Central Bank expected to unleash new stimulus, the SNB is under close scrutiny for possible action it will take to contain the currency’s strength. Sight deposits jumped almost 2.8 billion francs last week, the most in more than two years and a sign the central bank has been intervening in currency markets.
Stronger Currencies, Who Want's Em?
- Argentina
- Venezuela
- Turkey
- Iran
- Columbia
- Anyone else?
Well, I am sure there are some other minor counties like Sudan or Uganda. Perhaps Mexico or Russia.
Monetary Madness
Meanwhile, prepare for an escalation of the currency war and more Monetary Madness such as Inverted Negative Yields in Germany and Negative Rate Mortgages.
Also, please see Fed Trapped in a Rate-Cutting Box: It's the Debt Stupid
And expect more howls from Trump.
This material is based upon information that Sitka Pacific Capital Management considers reliable and endeavors to keep current, Sitka Pacific Capital Management does not assure that this material is accurate, current or complete, and it should not be relied upon as such.
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