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SNB Surprises, but Fed Stays Course
The Swiss National Bank surprised the market by announced a negative 25 bp rate on sight deposits and lower the 3-month Libor range to -0.75% to 0.25%. Although SNB President Jordan revealed that it was inflows from Russia that compelled it to intervene in recent days, the fact of the matter is that the negative rate goes into effect the same day as the ECB's next meeting, January 22. The announcement took the market by surprise. The SNB had given no clue at last week' s quarterly review. The euro immediately shot up to CHF1.21 from just above the floor of CHF1.20. Nearly as quickly the gains were retraced, leaving ... (full story)