Instant View: SNB leaves rates unchanged, Sweden and Norway hike again
LONDON (Reuters) — In a big day for central banks across Europe on Thursday, Switzerland shocked markets by leaving its interest rates unchanged, while Sweden and Norway met expectations with a quarter-point hike each.
The Swiss National Bank held its key rate unchanged at 1.75%, against analyst expectations for a quarter-point increase, but said further tightening could not be ruled out.
Sweden raised its key policy rate by a quarter of a percentage point to 4%, as expected, and said it might need to do more to bring inflation back to its 2% target.
And in Norway, the central bank raised its benchmark interest rate by 25 basis points to 4.25% to curb inflation, as widely predicted, and, in a surprise move, said it would likely hike again in December.
The Bank of England unveils its rate decision at 11:00 GMT.
MARKET REACTION:
SWITZERLAND: The Swiss franc fell sharply after the SNB rate decision and was last down almost 0.7% against the dollar at 0.9044. It was down 0.7% against the euro and set for its biggest one-day drop since March, when turmoil engulfed the Swiss banking sector.
Swiss 10-year bond yields briefly jumped 18 bps to 1.26%, their highest since April.
SWEDEN: The Swedish crown rallied and was last up 0.6% against both the euro and the dollar, gaining some respite from a recent battering that has seen the currency slide to record lows against the euro.
Short-dated bond yields briefly touched their highest levels since 2008
NORWAY: The Norwegian crown edged higher against the euro and the dollar. It was last up 0.3% at 11.48 per euro.
COMMENTS:
ALESSANDRO BEE, SENIOR ECONOMIST, UBS, ZURICH:
«The Swiss economy is currently confronted with inflation and economic risks. By refraining from raising interest
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