Financial markets this week The Swiss Central Bank took currency and bond markets by surprise on Thursday in announcing that it had abandoned the cap placed on the Swiss Franc exchange rate with the Euro. The Swiss Franc subsequently appreciated sharply as official Swiss interest rates were also pushed further into negative territory. As a result, investors sought alternative safe-haven assets, which resulted in US bond yields falling. The US 5-year government bond yield now stands at 1.20%, a 0.22% fall for the week. Australian bond yields were steady this week, although the Swiss decision did see an increase in support for the A$ given its safe haven status. Against the US, the A$ rose US 1.0 cents to US 82.2 cents. Better than expected labour force data also provided a source of support for the A$. During December, the number of workers employed rose by 37,400 following a 45,000 increase in November. The increased employment allowed the unemployment rate to fall from 6.2% to 6.1%. Share markets experienced negative movements this week. A combination of weak bank earnings results and lower than expected retail sales contributed to a 3.4% fall in the US S&P 500 Index. Losses on the local market were less significant, with the S&P ASX 200 Index falling 0.9%.
Posted on: Sun, 18 Jan 2015 22:36:18 +0000
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