In the latest Swiss economic outlook report, the UBS Chief Economist, Daniel Kalt, made some key comments on the Swiss National Bank’s (SNB) rate hike outlook and the Swiss franc.
Main Highlights:
Expects first SNB rate hike at the start of 2020, similar to that of the ECB.
CHF still overvalued.
Further strength poses danger for further slowdown in Swiss economy.
Rate hikes by SNB, ECB will likely be reflected by rising yields towards end-2019.
Rates to remain historically ‘very low’ for next few years even after 2020.
Initial rate hike unlikely to trigger panic in the bond market.
Expects long-term yields to rise in a fairly mild manner.
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