Investor expectations are building that the Swiss National Bank(SNB) will take its key interest rate even further below zero as itfaces a renewed franc appreciation.

Amid escalating trade tensions and market jitters, the Swisscurrency has gained about 2 percent against the euro in the pastmonth. Futures for March 2020 are now putting an almost 50 percentprobability of a 25 basis-point-cut in the SNB's deposit rate. It'scurrently at minus 0.75 percent, the lowest rate among the world'smajor nations.

The franc's gain buttresses the case of SNB President ThomasJordan and fellow officials, who declined to move off theirultra-low rates last year, even as the currency weakened and theeconomy expanded at a strong pace. They stressed that markets werestill fragile, and Jordan has repeatedly said the current policyremains necessary. He's also said that rates can go lower still ifneeded.

The franc is moving along with other haven assets, which haverallied amid a decline in stocks on concern about the outlook forglobal growth. The German 10-year bond yield fell to a record lowon Monday.

Futures also show investors betting on rate cuts by U.S. Federal Reserve and theEuropean Central Bank (ECB), where a gauge of inflationexpectations has plummeted.

ECB policymakers meet this week and are likely to reiteratetheir promise that Eurozone interest rates will remain at recordlows until the end of the year.

The SNB, whose deposit rate has been unchanged since 2015, holdsits policy meeting a week later. It considers the franc highlyvalued, and will probably reiterate that stance on June 13.

— With assistance from RichardJones.

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