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Bears Still in Control


Tops 0.80 as Reflationary Theme Rolls On


Volatile, Outlook Remains Bearish


Accelerates Off Bull Trigger


(J1) Uptrend Firm

By Luke Heighton
     FRANKFURT (MNI) - Appropriate central bank responses to any downturn in the
world economy caused by trade disputes are unclear, Swiss central bank governor
Thomas Jordan said on Wednesday.
     Here are key points from the speech in Berne, Switzerland:
     -- The optimal monetary policy response for a central bank is in the case
of a negative supply shock or an abrupt and hefty rise in tariffs is therefore
"not immediately obvious", Jordan said, and it is difficult to predict how
central banks would behave "in the event of a fully fledged trade war".
     -- Current tariff impositions "will not plunge the world into a recession.
Any such fears are exaggerated". Yet, "should the protectionist spiral continue,
however, this could stall the global expansion phase and fuel inflation,"
alongside a slump in confidence and financial market upheaval.
     -- Recent uncertainty has not so far had any lasting obvious effect on the
value of the Swiss franc. However, a trade war could see it become a safe haven,
or it might come under downward pressure.
     -- China's elevation to the status of leading trading nation is likely to
have markedly accelerated the pace of structural change in some countries,
negatively impacting on specific industries and sections of the population.
Similarly, the impact of technological progress in driving structural change is
at least as strong. "There is no escaping the reality of this ongoing structural
change if a country wants to maintain its competitiveness over the long term."
--MNI Frankfurt Bureau; +49-69-720-146; email:
--MNI London Bureau; +44208-865-3829; email:
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