Pressure on SNB to cut hasn’t been this high in years

Bloomberg

Swiss National Bank (SNB) logic would dictate that it’s time to cut interest rates.
With markets in a tailspin due to the coronavirus, the spread between Swiss and German bond yields that SNB President Thomas Jordan has repeatedly cited as necessary to prevent the franc from appreciating has melted away.
The yield on German 10-year government bonds plunged to a history low of -0.86% on Monday, reducing the gap with their Swiss counterparts to less than 10 basis points. The gap between Swiss and German 10-year bond yields has diminished
Bets are on for a European Central Bank interest rate cut, following on from emergency 50 basis point reduction unleashed by the Federal Reserve. That could necessitate an SNB response, after the franc broke through the 1.06 per euro mark and on Monday hit its strongest since 2015.
It was that year that the SNB got rid of its 1.20 per euro cap on the franc and cut its deposit rate to its current -0.75%, saying it needed to maintain the rate differential with the euro area in the run-up to quantitative easing.

The SNB’s next rate decision is scheduled for March 19, though it has a history of acting on an ad-hoc basis. Speaking at an event in Zurich on March 3, Governing Board Member Andrea Maechler said the SNB didn’t feel under fire.
“The SNB is never under pressure” to act, she said. “We have a very clear mandate, which is to maintain price stability, and with this in mind we will make our decision.”