Yesterday's interest #ratehikes from Swiss national Bank surprised us a bit: indeed, we had anticipated in our morning podcast strategy a 75 bps move - Fed-style really.. - and they did 50 bps "only"...
Anyway, the really interesting if not plain fascinating point is that the vast majority of market participants, both within and outside Switzerland seemed to be caught off-guard by that move.
But what is so surprising? The world has changed (and not only from an inflation risk perspective), the relative weakness of CHF against USD gave #SNB a critical window to start implementing its logical rate normalization process and don't central bank tend to operate like B52s i.e. in squadrons anyway?
Last but not least, it is not exactly the first time that SNB kind of abruptly forces market participants into the north face...of the Matterhorn of course!
Looking forward, expect more waves of monetary carpet-bombing in the near future and, yes, in Switzerland also; with an important possibly strategic difference which is that defenders will not be caught off-guard next time.
Stay tuned !
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