As most of you are aware the Swiss National Bank rattled markets overnight, removing their 1.20 floor on the EURCHF exchange rate whilst cutting official interest rates to -0.75%. Plenty has been written about it. Yes, we know it’s a pre-emptive move before the ECB likely embarks on QE next week and Greek elections on January 25. Without regurgitating the same material that has been seen countless times already I thought it would be better to portray the impact on Swiss markets in graphical form. Enjoy.

EURCHF

First the impact on the EURCHF exchange rate. This chart from Thomson Reuters has a low of .8696. In some instances quotes were reported to be seen in the mid-70’s.

EURCHF pip ranges

The move created the largest intraday range since the inception of the Euro back in 1999, dwarfing the day the SNB initiated the EURCHF floor back on September 6, 2011.

EURCHF percentage falls

The decline was also the largest in the history of the pair. Most of the largest falls before yesterday occurred during the height of the European financial crisis (so far).

Swiss Yield Curve

The impact was also felt on the bond market. The Swiss Government is currently paid to borrow money out to 8 years. As a safehaven I doubt negative interest rates will dissuade a continued bid given risks emanating elsewhere in financial markets.

SMI

Equities were also pummelled with the SMI falling 8.7%. It could have been worse, at one stage it was lower by 13%+.

SMI Percentage declines

Still, despite the bounce off the lows, the decline was the second-largest in percentage terms going back to 1988.

To read the press release that heralded the moves click here:

http://www.snb.ch/en/mmr/reference/pre_20150115/source/pre_20150115.en.pdf

To read the remarks of Thomas Jordan, SNB Chairman, post the decision, click here:

http://www.snb.ch/en/mmr/speeches/id/ref_20150115_tjn/source/ref_20150115_tjn.en.pdf

 

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