Unexpected rate hike by Swiss National Bank
Swiss National Bank surprised markets on June 16 by raising interest rates.
The policy rate was raised by 0.5 percentage points to 0.25%. Concerned that inflation could run out of control, the bank pursued a rate hike for the first time since September 2007, 15 years ago.
Furthermore, it said that, in the near future, additional policy rate increases may be necessary.
Following the decision, the Swiss franc surged.
With the Bank of Japan's decision meeting results due tomorrow the 17th, the yen also saw a reversal of short yen positions.
Also, as the Swiss National Bank unexpectedly raised rates,there was global risk-off as it became unclear what would happen next (neutral positions, no exposure).
The core (excluding fresh foods and energy) year-on-year price index rose 1.7% in May.
It's not a state where we can’t wait and see a bit longer.
Against the euro, the exchange rate was firm. There is no need to worry about a currency depreciation. On the contrary, it remained relatively firm.
The rate hike is not for currency defense.
Nevertheless, they raised rates.
What will the Bank of Japan do? I think it will be pushed to raise rates.
This is not about combating yen weakness or curbing demand (ideally, they would like to stimulate demand); rather, it is a gesture to address inflation.
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It's not a state where we can’t wait and see a bit longer.
Against the euro, the exchange rate was firm. There is no need to worry about a currency depreciation. On the contrary, it remained relatively firm.
The rate hike is not for currency defense.
Nevertheless, they raised rates.
What will the Bank of Japan do? I think it will be pushed to raise rates.
This is not about combating yen weakness or curbing demand (ideally, they would like to stimulate demand); rather, it is a gesture to address inflation.
-
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