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Flash: Bearish CHF outlook reiterated by IMF report – UBS

FXstreet.com (Barcelona) - According to the UBS Research Team, “Our bearish franc view is reinforced by the IMF's recent report – the IMF advises that 'if safe haven inflows return, the SNB should consider imposing a negative interest rate on bank excess reserves'.”

In essence, this would discourage inflows, and while 'negative interest rates have potential drawbacks, including possibly intensifying pressure in the mortgage market...these are likely to be less relevant under the current circumstances in Switzerland than in other countries'.

Indeed, a policy of negative interest rates may help the SNB with its dilemma of super-loose monetary conditions warding off currency appreciation but fuelling housing markets. This is because the impact of negative interest rates on mortgage rates depends on the pass-though. If banks cannot pass through negative rates to depositors, they may increase lending rates instead to compensate for the losses they would now face from keeping excess bank reserves at the central bank.

Flash: Gilts remain bearish below 118.64 level – RBS

Gilts remain bearish below 118.64, marking the 123.6% Fibonacci projection from the Feb-Mar impulse wave and a gap from 09/10 March.
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AUD/USD jumps to 0.9825 on pro-QE Bernanke

The AUD/USD has reacted to the upside following the Bernanke testimony and after jumping around 80 pips from 0.9755 the pair tested intra-day highs at 0.9825. Currently it's pricing at 0.9780.
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