Wyn Thomas - Axys Investment Management

Weekly Market Update 16th January 2014

SWITZERLAND’S DECISION SHAKES UP MARKETS THIS WEEK
The Swiss trumped all other news stories with their decision to largely abandon the Franc and let it rise unconstrained. On the surface this seems
fairly trivial; Switzerland is a small economy of little interest to most of us without the need to hide our assets from the authorities. However, the
implications could be severe. The problem Switzerland has is people trust it – making it a safe haven destination of choice as optimism in the Eurozone
diminishes; ever since the Greek debt crisis. This has been pushing up the Swiss franc, hurting exports and importing deflation as the cost of foreign
goods continues to fall. The central bank’s acknowledgement, that their unconventional monetary policy will be futile should the ECB go ahead with
Quantitative Easing, is a welcome surprise – the dramatic correction in the exchange rate is not so warmly received. Read More…