Martin Theyer’s Post

It's back. Independence and freedom to move naturally. We are not sure who told RBI that objectivity is a necessity or some kind of enlightenment hit them, but the fact is that it is happening. Rupee is finally moving as per fundamentals. The dollar index has moved up to 104.15 this morning. And the factors are quite obvious. A rate cut in Europe by SNB. This coincides with what we have been pressing for a long time.Dollar is a relative currency. And the strength/weakness depends on how other countries are doing in economic terms and whether there is a scare in the markets for any reason. We have been harping upon the fact that the currency whose central bank cuts rates first will take a dip. Switzerland may have Swiss Franc as a separate currency but being a part of the European Union, the ethos echoes and reverberates, signalling the overall economic health of the broader area. The Euro has crashed 1 big figure from 1.0940 to 1.0840 in a days time. The Yuan has shot up in response and now trades 7.2542. With CNH INR appreciating to 11.48 from 11.52 it would be a good time for importers to cover for a weeks exposure. Rupee is likely to open around 83.28. The likely range for the day is 83.20 to 83.35. We expect RBI to intervene a bit around 83.40 ( maintaining volatility is their job and not restricting it). The realisation has dawned upon, though a bit late.

First Rate Cut by a G-10 Central Bank: Swiss National Bank (SNB) Cuts Rates by 0.25% to 1.5%! SNB Interest Rate Decision Highlights: Reasoning for Cut: Reduced inflationary pressure and appreciation of Swiss franc. Inflation below 2% and expected to stay that way for the next few years. Foreign Exchange Market: SNB remains active in the market as needed. Inflation Forecast: Inflation is expected to average 1.4% in 2024, 1.2% in 2025 and 1.1% in 2026. The projection is significantly lower than December forecast owing to quicker slowdown in goods inflation coupled with lower second-round effects. Swiss GDP Growth: Forecast to be around 1% in 2024 due to weak foreign demand and franc appreciation. Unemployment expected to rise gradually. Market Reaction: Swiss Franc declines more than 1% against the Euro to 0.9763, after strengthening for much of the past 3 years. #Rates #FX #Vol #Yields #Bonds #Switzerland #SwissNationalBank #SNB #InterestRates #Macro #Economy #Inflation #Currency

𝐉𝐚𝐩𝐚𝐧 𝐑𝐚𝐢𝐬𝐞𝐬 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐑𝐚𝐭𝐞𝐬 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐅𝐢𝐫𝐬𝐭 𝐭𝐢𝐦𝐞 𝐢𝐧 𝟏𝟕 𝐲𝐞𝐚𝐫𝐬 On Tuesday, Japan’s central bank hiked interest rates above zero for the first time since 2007. This marks the end of an aggressive effort to support the economy, which has failed to develop. Read More: https://bityl.co/OqSb #japan #japannews #InterestRates #InterestRates2024 #economy #japaneconomy #EconomyNews #news #NewsUpdate #BusinessNews #insightssuccess

Lets make a deal where you will deposit currency 10 and will receive your currency 9 back and that too just in short term. Isn’t it a great deal? 😏 Yes it’s a happening around the world. Bank of Japan has recently increased interest to “0% to 0.1%” from -0.1%. 📈 You must be wondering what in the world this negative interest rate is and how is this actually possible “I lend money and also pay for it instead of receiving interest.” 😕 😕 Yes, it’s possible. In fact many economies have implemented negative interest rates in the past. Sweden, Switzerland and yes of course Japan are among them. Now you may wonder why does economies have negative interest rates and how does it make sense? 🤔 Well, Interest is cost of credit or cost of money. Policy interest rates set by central bank of economy provides the key benchmark for borrowing cost. Central banks vary policy rate in response to changes in economic cycle. In simple words, higher interest rate encourage savings while lower interest rate encourage consumption and reduces cost of business investment. Negative interest rate gives consumers and businesses an incentive to spend or invest money. So now we know this unconventional strategy is indeed possible and to combat the situation of deflation central banks may even use negative interest rates. 😌 Thank you for reading. I have tried to keep it simple and short, If you need any further details/ discussion please comment down below.