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MNI BRIEF: Paper Probes ECB Rate Rise Effect On Swiss Yields

(MNI) London
(MNI) London
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Surprise ECB rate hikes have a greater effect on Swiss sovereign bond yields than on Swiss stock prices, a working paper published by the SNB Wednesday argues. Unexpected tightening changes exert greater influence over Swiss bond yields via portfolio rebalancing than expansionary surprises, they conclude.

But the paper raises questions over how the relationship will develop now that the ECB has exited negative interest rates.

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Surprise ECB rate hikes have a greater effect on Swiss sovereign bond yields than on Swiss stock prices, a working paper published by the SNB Wednesday argues. Unexpected tightening changes exert greater influence over Swiss bond yields via portfolio rebalancing than expansionary surprises, they conclude.

But the paper raises questions over how the relationship will develop now that the ECB has exited negative interest rates.

Keep reading...Show less