Core Viewpoint - The Swiss National Bank (SNB) decided to maintain the benchmark interest rate at zero for the second consecutive time, aligning with expectations from economists surveyed by Bloomberg [1] Group 1: Monetary Policy Decisions - The SNB's decision to keep the interest rate unchanged reflects a slight decline in inflation over recent months, with the central bank aiming to ensure a gradual rise in inflation over the coming quarters [1] - The SNB has revised its inflation forecasts downward, lowering the 2026 inflation expectation from 0.5% to 0.3% and the 2027 expectation from 0.7% to 0.6% [1] Group 2: Currency and Economic Impact - Following the SNB's announcement, the Swiss Franc continued its upward trend, appreciating by 0.1% against the Euro to 0.9346 and by 0.2% against the US Dollar to 0.7985, reaching its highest level since November 18 [2] - The strong Swiss Franc is a key factor suppressing inflation, as currency appreciation reduces import costs, exerting downward pressure on domestic prices [6] - Recent optimism regarding a trade agreement between Switzerland and the US has catalyzed the Franc's strength, alleviating trade uncertainties and contributing to its appreciation [6] Group 3: Economic Growth and Inflation Outlook - The SNB has adjusted its economic growth forecast for 2025 to "around 1%", a more optimistic outlook compared to the previous prediction of "slightly below 1%" [6] - The inflation rate in Switzerland has remained below market expectations for three consecutive months, with November's inflation rate slowing to zero, contradicting the SNB's earlier predictions of a rebound in inflation this quarter [6] Group 4: Policy Challenges - The SNB faces a challenging policy trade-off between persistent weak price prospects and the structural risks associated with reintroducing negative interest rates, which have previously harmed the pension system, savers' interests, and financial stability [7] - External pressures may arise from the recent 25 basis point rate cut by the Federal Reserve, potentially narrowing interest rate differentials and exacerbating risks of Swiss Franc appreciation and deflation [7] - The recent rise in global bond yields and uncertainties regarding US policy paths may provide the SNB with some leeway in managing cross-border capital flows [7]

Core Viewpoint - The international gold market has experienced significant volatility, with a notable drop in prices following a series of record highs, leading to varied responses in investment and consumer behavior [1] Group 1: Market Trends - As of October 21, the international spot gold price fell sharply by 6.3%, marking the largest single-day decline since April 2013 [1] - On October 22, gold prices further declined, approaching the $4000 per ounce mark [1] - The fluctuation in gold prices has triggered a chain reaction in both investment and consumer markets, with online gold stores preparing for the upcoming "Double Eleven" shopping festival [1] Group 2: Consumer Behavior - Major brands continue to price gold jewelry at high levels, with prices for mainstream brands like Chow Tai Fook at 1223 CNY per gram and other brands similarly priced [2] - Brand representatives indicate that significant price adjustments are unlikely until there is a sustained downward trend in gold prices [2] - Consumers are finding opportunities for better deals online during the "Double Eleven" event, with platforms offering exclusive coupons for gold purchases [2] Group 3: Regulatory and Quality Standards - The purity labeling of gold has been standardized, with the national standard stating that gold content must be no less than 990‰ to be labeled as "foot gold" [4] - The previous terms like "thousand-foot gold" and "ten-thousand-foot gold" have been eliminated to prevent price inflation based on purity claims [4] Group 4: Secondary Market Activity - The second-hand market for gold is becoming increasingly active, with users listing gold jewelry for resale on platforms like Xianyu [4] - Some sellers are pricing second-hand items above official retail prices, which may be due to supply shortages in brand stores [4][15] - The wholesale market in Shenzhen shows a significant price difference, with gold priced at 936 CNY per gram, reflecting a 40% increase since January [15] Group 5: Investment Market Dynamics - There is a noticeable divergence in the investment market, with long-term investors seeing substantial gains while short-term traders face losses [16] - Long-term investors, such as those in hedge funds, maintain a positive outlook on gold despite recent price corrections, citing ongoing factors like de-dollarization and inflation expectations [16] - Short-term investors are experiencing pressure from recent declines, with many choosing to hold their positions rather than sell at a loss [18]

Inflation Expectations - The New York Fed's inflation expectations rose for the one-year term to 3.1% [1] - The five-year inflation expectation, which the Fed is most concerned about, increased by three ticks to 2.9% [2] - Expectations for gas prices, medical care, college, and rent all declined [2] Unemployment Expectations - Unemployment expectations dropped 2.3 percentage points, reaching the lowest reading since January 2025 [2] - There is less concern about job loss, but paradoxically more concern about finding a job [3] Interest Rate Expectations - A rate cut for September is almost fully priced in [3] - October is also priced in, and December has been the swing factor with a 51% probability [3][4] Fed Chair Candidate - Chris Waller is considered a front runner to become Fed chair [4] - Waller has presented the most convincing economic monetary policy argument for a rate cut [5] - Many Fed watchers, investors, and fixed income folks would be happy with Chris Waller [5] - Waller has shown flexibility to disagree with the chair and agree with the president on the issue of rate cuts [6]