The Swiss National Bank (BNS) announced a major loss in the first quarter of 2018 as capital markets experienced a stormy environment and the Swiss franc began to be out of control.
Although the central bank managed to pay dividends of 3,000 million Swiss francs, the central bank recorded losses of 3,900 million euros in its bond positions, 3,300 million Swiss francs in its portfolio and 200,000 francs Swiss in its gold assets. Finally, the appreciation of the Swiss franc led to a currency loss of 2,800 million Swiss francs, while CHF income reached 500,000.
The increase in interest rates in the euro area and in the US and turbulence in the stock markets has significantly affected the Swiss National Bank’s portfolio in the first quarter. However, the second quarter should be more favorable as the Swiss franc extended against its counterparts in the Group of Ten, 2.9% against the Dollar, 2.15% against the Pound and 1.8% against the single currency.
The stock market situation is more balanced with European markets developing strongly in April, while markets in the US barely move. Unfortunately, bond prices will continue to fall as interest rates rise on both sides of the Atlantic.