Swiss central bank decision was completely seismic – Charles Stanley

Retail foreign exchange brokers from New Zealand to New York were nursing hefty losses from the Swiss National Bank’s shock move to abandon a cap on its currency. Charles Stanley Chief Economist Jeremy Batstone-Carr says the Swiss National Bank’s decision was completely seismic, the obvious winner here will be euro zone manufacturing and the obvious loser will be the Swiss exports sector.

LONDON, ENGLAND, UK (JANUARY 16, 2015) (REUTERS) – SLATE, READING: “SWISS EXPORTERS HIT BADLY BY YESTERDAY’S DECISION. WHO ELSE LIKELY TO SUFFER?”

CHARLES STANLEY, CHIEF ECONOMIST, JEREMY BATSTONE-CARR ,

“Hi there, yes I certainly agree that – well first of all the Swiss National Bank’s decision to uncap the Swiss franc was of course completely seismic, it hardly needs for me to say that. It is a micro-economic event, all currency moves are adjustment factors so therefore there will be winners and losers and the obvious winner will be euro zone manufacturing one imagines because the euro will weaken on the foreign exchanges and the obvious loser will be the Swiss exports sector. It is also fair to say that holders of Swiss denominated debt will also suffer of course because the Swiss National Bank cut the countries rate from -0.25 to -0.75 percent.”

SLATE, READING: “COPPER PRICES IN A ROUT – A BAD OMEN?”

CHARLES STANLEY, CHIEF ECONOMIST, JEREMY BATSTONE-CARR ,

“I think the copper price is certainly falling very sharply but you need to see the bigger picture here which pertains not just to copper but to the commodity complex more generally. And the point that I’d like to make is that if you step away from the day to day cut and thrust of financial market action what are bonds, what are commodity prices telling you about the outlook for the global economy? There is a major difference there from what equities are telling you which is by and large that everything is just about all right we are in a moderation, we are in a growth recession but we are not in a stagnation. If you look at bond pricing and if you look at commodity pricing I think you would have to argue the other way and the concern I have of course is that in relation to commodities other than oil this is not simply a question of weak or substantial supply, it is actually a question of weak demand and that I think does pose major challenges.”

SLATE, READING: “LATEST NEWS FROM RUSSIA IS OF BUDGET CUTS AND PRICES RISING AT EVEN FAST RATE THAN BEFORE. SHOULD RUSSIAN CONSUMERS BRACE FOR EVEN MORE BAD NEWS THIS YEAR?”

CHARLES STANLEY, CHIEF ECONOMIST, JEREMY BATSTONE-CARR ,

“Turning to the Russian economy our view is very much in line with consensus. That the economy is in a very very bad place at the moment and of course the plunge in the currency has made matters significantly worse. I think that Russian consumers are indeed going to have to brace themselves for a few very challenging months ahead. But of course the country, it could be argued is well versed in dealing with the economic crises and therefore I suspect that many in Russia will simply just accept this as part of the inevitability associated with the aggressive sanctions being imposed on the country by the west and of course in part the falling oil price which may also have something to do with the sanctions process.”

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