Reuters reporting a joint statement from SNB/Swiss govt

  • intend to cut debt for a ninth consecutive year
  • aiming for CHF 74bln debt end-2016 vs CHF 96 bln in 2007
  • will issue CHF 6 bln in new treasury bonds which will cut debt by CHF 3.4bln
  • officials seeking to capitalise on low interest rates and Switzerland's reputation for safety to guarantee cheap borrowing costs for years to come

Says treasury spokesman Philipp Rohr:

"We will continue to follow the strategy of trying to lock in low interest rates for as long as possible.

The negative interest rates, for many people, are almost like an insurance premium that they pay for certainty that they've put their money in a safe place"

Investors generally buy and hold Swiss long-term bonds until maturity, resulting in a limited secondary market, which means the SNB has little scope for QE

The joiunt statement is timely, and perhaps not coincidental, ahead of the SNB policy meeting and interest rate decision due on Thursday

Adam had this from Credit Suisse where they said:

"Our view is that the SNB will still cut this Thursday, most likely by 25bp to -1.00bp. Although Draghi did not deliver to market expectations, our Swiss Economic Research team still believes that it will be important for the SNB's credibility to respond to the ECB cut, especially when domestic data are so weak,"

USDCHF currently chewing its way lower through 0.9960 support to post 0.9948 as EURCHF drifts lower to 1.0815