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

Amid escalating trade tensions and market jitters, the Swiss currency has gained about 2 percent against the euro in the past month. Futures for March 2020 are now putting an almost 50 percent probability of a 25 basis-point-cut in the SNB’s deposit rate. It’s currently at minus 0.75 percent, the lowest rate among the world’s major nations.

The franc’s gain buttresses the case of SNB President Thomas Jordan and fellow officials, who declined to move off their ultra-low rates last year, even as the currency weakened and the economy expanded at a strong pace. They stressed that markets were still fragile, and Jordan has repeatedly said the current policy remains necessary. He’s also said that rates can go lower still if needed.


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