The Swiss stock market lost up to 12% after the surprise announcement of the abolition of the central bank of the floor rate between the Swiss franc and the euro. The Paris Bourse resistant thanks to German GDP
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The stock markets do not like be taken by surprise and the announcement of the abandonment of the floor rate of the Swiss franc against the euro by the Swiss National Bank is clearly a. The result was immediate on equity markets in the wake of the surge in the Swiss franc.
After opening up 0.66%, the SMI of Zurich Stock Exchange was moving towards a fairly quiet day. But the sudden announcement of the SNB caused a drop in Swiss equities. The index rose in minutes 9252 points, it was 10.30 in 8461 point, 20 minutes later, a dip of 8.5%! More than two hours after, investors are still not able to digest the news, the SMI plunged to 12.1%, before limiting its decline to 9% shortly after 14 pm. The nervousness was palpable in any case before the press conference the SNB expected at 13:15. “A shock, an explosive reaction” is the feeling that comes up frequently in the discourse of commentators.
Richemont, Swatch, down sharply Adecco
According to research firm Capital Economics in London Economic Analysis, told AFP, the decision of the SNB is “surprising”. “We believe that the SNB will soon be forced to intervene to prevent rapid appreciation of the Swiss franc vis-à-vis the euro”, said the Capital Economics analysts. “Switzerland’s decision can clearly understand as a preventive action just before the ECB launched its sovereign debt buyback program on January 22, which goes one step further dilute the value of the euro and its defeat monetary policy “ahead of his side Dembik Christopher, an economist at Saxo Bank.
The diving Swiss Exchange is explained in part by the risk of loss of competitiveness of multinational companies very oriented abroad. The penalty is also severe for the shares of these companies. 14 SMI values are losing more than 10% in stock, including Richemont (luxury – 16.7%), Swatch Group (watches, -16.2%), Actelion (-15.8% pharamcie) and Julius Baer ( Bank -14.9%). Nestlé loses 9.78% side.
Some rates into negative territory
The surprise was such markets, the European stock markets were, time, driven by the plunge of the Zurich Stock Exchange. In Paris the CAC 40 Index, which opened up 0.94%, up 2.46% lost in the wake of the Zurich Stock Exchange. Then, the index in Paris has taken over water and gained 1.58% to 4289 points. Investors welcomed the publication of the German GDP, up 1.5% year on year, slightly above expectations. An announcement came shortly after the SNB and was completely eclipsed in the first place.
The effect is also very clear on Swiss bond markets. Bond yields for a period of 1 to 9 years, all fell into negative territory, reflecting the decision of the Swiss central bank to lower its key rates -0.75%. One benchmark 10-year bonds (maturing in July 2025) even see performance drop to -0.09%.
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