Swiss central bank officials cut interest rates to their lowest level since September 2022 to stem the flow of funds into the Swiss franc and said the possibility of further rate cuts at present is relatively small.
On Thursday, officials led by the central bank’s president, Martin Schlegelmilch, cut the benchmark interest rate by a quarter of a percentage point to 0.25%, a move that was in line with the expectations of traders and the vast majority of economists. Schlegelmilch told reporters in Zurich that the central bank does not expect to ease monetary policy further at present.
“The rate cut has an expansionary impact,” Schleger said. “In this sense, the possibility of further easing of policy naturally decreases.”
This is the fifth rate cut by the Swiss National Bank in this round of easing cycle, and its interest rate is at the lowest level among the 10 most traded currencies globally. Analysts generally believe that this is the last rate cut by the Swiss National Bank in this round of easing cycle.
The Swiss franc gave up its gains after the decision was announced and fell slightly against the euro to 0.9572. Swap pricing indicates that traders expect the Swiss National Bank to hold off on further rate cuts this year.
The central bank’s enthusiasm contrasts sharply with the hesitation of the Federal Reserve and other global counterparts to further ease monetary policy. The Federal Reserve acknowledged on Wednesday that the current situation is highly uncertain. Similarly, the Swedish central bank kept borrowing costs unchanged and said it has completed its interest rate cuts.
Following an unexpected half-percentage-point cut in December last year, the Swiss National Bank took this move to consolidate its foreign exchange policy in preparation for future turbulent times. Although the Swiss franc has weakened this year, it remains a potential safe haven for investors seeking protection against instability as US President Donald Trump escalates global trade tensions and the war in Ukraine rages on.
“We remain willing to intervene actively in the foreign exchange market if necessary,” said Schlegel, sticking to the standard language of the Swiss National Bank as he observed a change in the background. “Uncertainty regarding global economic and inflation developments has increased significantly.”
Switzerland’s economy achieved its strongest growth in nearly two years last quarter, but policymakers maintained their outlook for the Swiss economy. The Swiss National Bank still expects economic growth this year to be between 1% and 1.5%.
“This is the Swiss National Bank’s last rate cut of the year,” said Karsten Junius, chief economist at UBS. “The upward revision of inflation conditions indicates that no further rate cuts are necessary.”
Technical analysis:
Gold: Yesterday, we already reminded you to keep an eye on the buying operation after the pullback. Our plugin has set up two buying operation settings in the 3028-3040 range. One is the direct buy limit green low buy, and the other is the yellow rebound buy after refreshing the location. The latter’s trend can achieve a relatively perfect profit. Today, we will continue to pay attention to this kind of rebound operation after refreshing the liquidity. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
Nasdaq: Yesterday, our plugin alerted that there was a risk of liquidity cleaning below 19,905. The overnight price movement largely conformed to the plugin’s alert. After breaking below 19,905, the price rebounded to 19,946 and then experienced a significant increase. Continue to attempt buying after liquidity cleaning within the day. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
Crude oil: Yesterday, the strategy we provided on the plugin was to go long with a blue breakout buy stop. As we can see, the result was excellent. The second attempt saw an immediate rise of over 1 dollar, while the stop loss space was less than 0.3. For today’s trading, we suggest paying attention to the confirmation signal of a pullback to around 67.50. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V:Hana-fgfg.
Today’s key financial data and events to focus on:
15:00 UK February government balance (billion pounds)
19:00 UK March CBI Industrial Prices Expectations Diff.
20:30 Canadian January retail sales (month-on-month rate)
21:05 New York Fed President Williams delivers a speech.
23:00 Eurozone March Consumer Confidence Index Preliminary Value
