Latest news with #JohnRevill
Yahoo
2 days ago
- Business
- Yahoo
Swiss sight deposits jump spurs talk of central bank currency intervention
By John Revill ZURICH (Reuters) -Cash lodged by commercial banks overnight with the Swiss National Bank rose to its highest level in 15 months last week, data showed on Monday, sparking speculation the central bank could be intervening to weaken the Swiss franc. Total sight deposits held by the SNB increased by 11.2 billion Swiss francs ($14.00 billion) to 475.3 billion francs, the highest level since April 2024. Normally an increase can be seen as a sign the SNB is buying foreign currencies from banks and crediting their accounts with newly created francs, a way to weaken the safe-haven currency whose high value has weighed on inflation. The SNB declined to comment on the data. GianLuigi Mandruzzato, an economist at EFG Bank, said the increase could mean the SNB intervened last week, although other factors could be involved. "With interest rates at zero and with the SNB reluctant to go negative, intervention is likely to be its favoured approach," he said. Maxime Botteron, an economist at UBS, said the sight deposit rise could signal interventions, although other explanations were more likely. "They could have intervened, but there was no urgent need to do so," he said. "The franc appreciated moderately against the euro last week, but did not reach the April high, and I don't think the SNB would intervene against the dollar." Instead, Botteron said the increase in sight deposits could reflect the expiration of SNB bills, where the principal is repaid to the banks who bought them at the end of their term and the money credited to their sight deposit accounts. The money could also be due to the SNB not rolling over existing repos, and instead repurchasing the instrument from banks and crediting their sight deposit accounts, Botteron said. Karsten Junius, chief economist at J. Safra Sarasin, doubted the SNB was intervening, with the sight deposit data more likely showing the SNB scaling back its use of bills and repos. "If they are reducing the use of these instruments, it could be because the SNB is trying to steer the SARON lower by taking less liquidity out of the market," he said, referring to the Swiss interbank rate. ($1 = 0.7999 Swiss francs)
Yahoo
25-06-2025
- Business
- Yahoo
Switzerland in talks with US as cost of F-35A fighter jets rises
By John Revill and Marleen Kaesebier ZURICH (Reuters) -Switzerland is holding talks with the United States after Washington tried to raise the price of new fighter jets Bern is buying for its air force, the government said on Wednesday. Bern chose Lockheed Martin's F-35A Lightning II as its next-generation fighter plane in 2021, with a fixed price of around 6 billion Swiss francs ($7.4 billion) for 36 jets, a decision that attracted controversy in neutral Switzerland. But the U.S. Joint Program Office overseeing the project said last year the price could be higher, and the U.S. Defense Security Cooperation Agency told Switzerland in February that the fixed price was a misunderstanding. Switzerland was informed the price for the F-35s would be dearer because of higher raw materials and energy costs, as well as higher U.S. inflation, with the sum potentially increasing by $650 million to $1.3 billion, the government said. "A contract is a contract," said Urs Loher, head of Swiss defence procurement agency Armasuisse. "With the procurement of the F-35A fighter aircraft, we're suddenly faced with a different reality, despite a clear fixed price." As the agreement prevents a legal settlement of the dispute, a diplomatic solution must be sought, the government said. Defence Minister Martin Pfister said talks were now under way with the U.S. authorities. "We still believe we'll find a solution with the U.S. authorities because they also have an interest in being perceived as a reliable contractual partner," Pfister said, while as a last resort Switzerland could cancel the deal. The decision to buy the F-35A was contested in Switzerland, with opponents arguing against replacing the country's aging F/A-18 jets with an unnecessary "Ferrari" option. Critics said Switzerland did not need cutting-edge warplanes to defend its territory, which a supersonic jet can cross in 10 minutes. The F-35A beat bids from Boeing's F/A-18 Super Hornet, the Rafale produced by France's Dassault and the four-nation Eurofighter built by Italy's Leonardo, Britain's BAE Systems and Airbus representing Germany and Spain. Still, Switzerland said it remained committed to the F-35A, and that cancelling the order would have serious consequences. "Switzerland would no longer be able to guarantee the safety of its airspace and population from 2032, as the current F/A-18 fighter aircraft would reach the end of their service life," Pfister said. ($1 = 0.8067 Swiss francs)
The Star
25-06-2025
- The Star
Body found in search of Swiss village buried by glacier debris
ZURICH (Reuters) -Search parties combing the Swiss Alpine village that was buried last month after the collapse of a glacier have found human remains, police said. Police did not confirm if the remains were of a 64-year-old man who was reported missing in Blatten after it was engulfed by millions of cubic meters of ice, mud and rock. The village's 300 residents had already been evacuated earlier in May after part of the mountain behind the Birch Glacier began to crumble. "As part of a coordinated search operation in the Tennmatten area of Blatten, human remains were found and recovered," Valais Cantonal Police said late on Tuesday. Formal identification of the remains is now underway, the police said. (Reporting by John Revill, Editing by Miranda Murray)
Yahoo
19-06-2025
- Business
- Yahoo
As war and tariffs fog the outlook, some central banks trim rates
By John Revill and Terje Solsvik ZURICH (Reuters) -The Swiss and Norwegian central banks became the latest European rate-setters to ease monetary policy on Thursday, citing a weaker inflation outlook that contrasted sharply with the Federal Reserve's warnings about higher U.S. prices. The Bank of England kept rates on hold as expected, while flagging that they would remain on a "gradual downward path" in a finely balanced statement that also acknowledged "heightened unpredictability" in the global environment. U.S. President Donald Trump's haphazard threats of heavy trade tariffs and an escalating Israel-Iran conflict have left top central banks trying to steer policy in conditions of near-unprecedented uncertainty for the global economy. Speaking after a two-day meeting where Fed policymakers kept rates on hold, the U.S. central bank's chair Jerome Powell on Wednesday laid out how import tariffs imposed on America's trading partners will drive up prices for U.S. consumers. Trump is due in coming days to say whether tariffs currently pegged at a 10% baseline will rise - in some cases to more than double that level - in a move seen weakening the global economy and so keeping a lid on inflation pressures in many countries. "Inflationary pressure has decreased compared to the previous quarter," the Swiss National Bank said as it cut rates by 25 basis points to zero and did not rule out returning to negative rates. In a move that took most analysts by surprise, even Norway's central bank - long the most hawkish of major central banks - also cut its policy rate by 25 basis points said there were more cuts to come due to a more benign outlook for prices. "Inflation has declined since the monetary policy meeting in March, and the inflation outlook for the coming year indicates lower inflation than previously expected," Governor Ida Wolden Bache said of inflation which slowed to 2.8% in May. That mirrored the view taken by Sweden's central bank, which cut its key interest rate to 2.00% from 2.25% on Wednesday and said that, with price pressures weak, it may ease further before the end of the year to boost sluggish growth. On June 6, the European Central Bank cut its main interest rate for the eighth time in the past year and signalled a pause in policy easing at least next month because inflation was now safely back at its 2% target after three years of overshooting. CAUTION, LITTLE CONVICTION Earlier this week the Bank of Japan kept interest rates steady and said it would move cautiously in removing remnants of its massive, decade-long stimulus. Governor Kazuo Ueda said the BOJ's near-term focus was on downside risks, notably the hit from U.S. tariffs. The latest set of central bank decisions, covering most of the Group of 10 major currencies and their economies, gives a snapshot of the impact policymakers expect significantly less free global trade to have. For the U.S. economy, the Fed sketched a modestly stagflationary picture, with growth in 2025 slowing to 1.4%, unemployment rising to 4.5%, and inflation ending the year at 3%, well above the current level. Fed policymakers signalled borrowing costs are still likely to fall in 2025, but chair Powell cautioned against putting too much weight on that view. "No one holds these ... rate paths with a great deal of conviction, and everyone would agree that they're all going to be data-dependent," he said. For other economies, the consensus for now is that the tariffs will inevitably hit their local industries and so weaken growth and jobs - but at least their consumers will be spared the inflationary hit coming for their U.S. counterparts. That all could change, depending on whether the escalation of conflict in the Middle East drives oil prices substantially higher than the gains seen so far and whether America's trading partners end up retaliating with tariffs of their own. That will become clearer from July 9, when Trump has said countries will face higher tariffs across the board unless they reach a deal with him. (Additional reporting by Howard Schneider in Washington; Leika Kihara in Tokyo; Simon Johnson in Stockholm; Writing by Mark John; Editing by Catherine Evans) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19-06-2025
- Business
- Yahoo
As war and tariffs fog the outlook, some central banks trim rates
By John Revill and Terje Solsvik ZURICH (Reuters) -The Swiss and Norwegian central banks became the latest European rate-setters to ease monetary policy on Thursday, citing a weaker inflation outlook that contrasted sharply with the Federal Reserve's warnings about higher U.S. prices. The Bank of England kept rates on hold as expected, while flagging that they would remain on a "gradual downward path" in a finely balanced statement that also acknowledged "heightened unpredictability" in the global environment. U.S. President Donald Trump's haphazard threats of heavy trade tariffs and an escalating Israel-Iran conflict have left top central banks trying to steer policy in conditions of near-unprecedented uncertainty for the global economy. Speaking after a two-day meeting where Fed policymakers kept rates on hold, the U.S. central bank's chair Jerome Powell on Wednesday laid out how import tariffs imposed on America's trading partners will drive up prices for U.S. consumers. Trump is due in coming days to say whether tariffs currently pegged at a 10% baseline will rise - in some cases to more than double that level - in a move seen weakening the global economy and so keeping a lid on inflation pressures in many countries. "Inflationary pressure has decreased compared to the previous quarter," the Swiss National Bank said as it cut rates by 25 basis points to zero and did not rule out returning to negative rates. In a move that took most analysts by surprise, even Norway's central bank - long the most hawkish of major central banks - also cut its policy rate by 25 basis points said there were more cuts to come due to a more benign outlook for prices. "Inflation has declined since the monetary policy meeting in March, and the inflation outlook for the coming year indicates lower inflation than previously expected," Governor Ida Wolden Bache said of inflation which slowed to 2.8% in May. That mirrored the view taken by Sweden's central bank, which cut its key interest rate to 2.00% from 2.25% on Wednesday and said that, with price pressures weak, it may ease further before the end of the year to boost sluggish growth. On June 6, the European Central Bank cut its main interest rate for the eighth time in the past year and signalled a pause in policy easing at least next month because inflation was now safely back at its 2% target after three years of overshooting. CAUTION, LITTLE CONVICTION Earlier this week the Bank of Japan kept interest rates steady and said it would move cautiously in removing remnants of its massive, decade-long stimulus. Governor Kazuo Ueda said the BOJ's near-term focus was on downside risks, notably the hit from U.S. tariffs. The latest set of central bank decisions, covering most of the Group of 10 major currencies and their economies, gives a snapshot of the impact policymakers expect significantly less free global trade to have. For the U.S. economy, the Fed sketched a modestly stagflationary picture, with growth in 2025 slowing to 1.4%, unemployment rising to 4.5%, and inflation ending the year at 3%, well above the current level. Fed policymakers signalled borrowing costs are still likely to fall in 2025, but chair Powell cautioned against putting too much weight on that view. "No one holds these ... rate paths with a great deal of conviction, and everyone would agree that they're all going to be data-dependent," he said. For other economies, the consensus for now is that the tariffs will inevitably hit their local industries and so weaken growth and jobs - but at least their consumers will be spared the inflationary hit coming for their U.S. counterparts. That all could change, depending on whether the escalation of conflict in the Middle East drives oil prices substantially higher than the gains seen so far and whether America's trading partners end up retaliating with tariffs of their own. That will become clearer from July 9, when Trump has said countries will face higher tariffs across the board unless they reach a deal with him. (Additional reporting by Howard Schneider in Washington; Leika Kihara in Tokyo; Simon Johnson in Stockholm; Writing by Mark John; Editing by Catherine Evans) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
