Switzerland is well known around the world for its high prices, with a Big Mac or a Starbucks latte costing over USD 6 each. The Swiss National Bank (SNB) itself describes the Swiss franc as “highly valued”, but it is less clear to us that the currency is significantly overvalued.
Since the start of 2018, the European economy has continued to disappoint investors. A multitude of factors, both external and domestic, have contributed to a backdrop of slowing economic growth. A revival in growth in China is the most likely catalyst for a turnaround—but perhaps later in the year.
The Bank of England (BoE) Monetary Policy Committee (MPC) today voted unanimously to keep interest rates at 0.75%. This was in-line with market expectations and as such there was a muted market reaction to the announcement.