March 25, 2020 / 9:41 AM / 14 days ago

Swiss investor sentiment hits 5-year low as coronavirus sours mood

ZURICH, March 25 (Reuters) - The coronavirus outbreak gutted Swiss investor sentiment, which fell to its lowest level in five years as the pandemic sent global stock markets tumbling and lifted expectations among those surveyed of an Swiss National Bank interest rate cut.

The indicator for March, based on a poll of certified financial analysts, shed 53.5 points to –45.8, Credit Suisse, which issues the indicator in cooperation with the CFA Society Switzerland, said on Wednesday.

This was its weakest reading since the so-called Swiss franc shock in January 2015, when the Swiss National Bank (SNB) abandoned its franc peg to the euro, prompting a sharp rise in the safe-haven franc.

More analysts surveyed now foresee the SNB cutting its -0.75% policy rate further into negative territory. Last week, the SNB held the rate steady but acknowledged stepping up interventions in currency markets to keep a lid on the franc.

Four-fifths of those surveyed see unemployment rising, even as the Swiss government unveiled an economic rescue package totaling around 42 billion Swiss francs ($42.88 billion).

“The respondents still see a 70% probability of inflation moving within the Swiss National Bank’s target range of 0 to 2% in the next five years,” according to the report.

“The survey participants believe that another rate cut may be necessary for the SNB to meet this target... The likelihood of a rate cut of 25 or even 50 basis points has almost doubled since the last quarter.” ($1 = 0.9794 Swiss francs) (Reporting by John Miller; Editing by Michael Shields)

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