Skip navigation Scroll to top
Scroll to top

LGT Navigator: Swiss National Bank monetary policy in focus

March 24, 2022

Following the interest rate turnaround by the Federal Reserve and the third interest rate hike by the British central bank, two further decisions on monetary policy direction are due today in Switzerland and Norway, when the Swiss National Bank and the Norges Bank will announce their answers to rising inflation and weakening growth. In addition to central bank policy, however, the focus remains on the war in Ukraine and its consequences, particularly for Europe's energy policy. In this context, concerns are now also growing about a cooling of the global economy accompanied by rising prices. 

Swiss National Bank monetary policy in focus

On the New York Stock Exchange, the Dow Jones Industrial closed -1.29% lower at 34'358.50 points and the S&P 500 fell -1.23% to 4'456.24 points. Also, in Asia this morning, the fear of further escalation between the West and Russia clouds stock market sentiment. Most stock indices recorded slight losses again after the gains of the previous day. US government bonds recovered somewhat from their recent losses and the yield on ten-year Treasuries fell to 2.30%.

Putin's announcement that Russian natural gas must be paid for in rubles with immediate effect also caused excitement, whereupon oil prices rose again. Meanwhile, US President Joe Biden has arrived in Brussels for talks with the EU, G7 and NATO. In addition to new economic sanctions against Russia, the issue of a possible complete embargo on Russian oil is to be discussed. Given the heavy dependence in some EU countries, this remains controversial. However, pressure is mounting, especially on Germany.

Monetary policy also remains in focus. The Swiss National Bank (SNB) is still unlikely to have any real room for maneuver on monetary policy at 09:30 (CET) today, given the crisis nature of the Swiss franc and the still "tolerable" inflation.

Is a G20 summit with Putin still possible?

A G20 summit is scheduled to take place on the Indonesian island of Bali at the end of October this year. With the war of aggression in Ukraine, however, Western nations are now asking whether Russia's President Vladimir Putin should, can or may be part of the meeting. Jake Sullivan, National Security Advisor to US President Joe Biden, said that Washington will consult with its partners and make a joint decision. China, on the other hand, has already emphasized its opposition to Russia's exclusion from the group of 20 largest industrialized and emerging countries. Putin himself, in any case, intends (so far) to attend the G20 meeting, the Russian ambassador to Indonesia confirmed.

Ifo expects lower growth with higher inflation

Against the backdrop of the war in Ukraine and the global repercussions, particularly in the energy markets, the Munich-based economic research institute Ifo now expects weaker growth in the German economy in its spring forecasts published yesterday. Accordingly, gross domestic product is expected to increase by +3.1% in the base scenario or by only +2.2% in the alternative scenario in the current year. Previously, the Ifo had assumed average GDP growth of +3.7% this year. In 2023, the growth rate should then be +3.3% (base scenario) or +3.9% (alternative scenario). Inflation is expected to move in a range of +5.1-6.1% this year - the highest level since 1982, according to Ifo's assessment. The Ukraine conflict and sanctions, as well as significantly higher commodity prices and ongoing supply bottlenecks, are dampening the German economy, Ifo commented.

Growth forecast for Switzerland confirmed, but with considerable risks

The Swiss Institute for Business Cycle Research (KOF) at ETH Zurich also sees the Ukraine crisis as a significant damper on growth for the Swiss economy. Although the previous growth forecast of +3% for the current year has been confirmed unchanged, this is only in the best-case scenario. In a negative scenario, i.e. the geopolitical crisis spreads and there is a full embargo on all Russian energy and raw materials exports, including to the EU, as well as a significant appreciation of the Swiss franc, growth in the Swiss economy this year could also amount to just +1.1%. For 2023, KOF expects a slightly lower growth rate of +2.0% in the base scenario (previously +2.1%). The negative scenario would see GDP growth of just +0.5%.

UK inflation cracks 6% mark

British consumer prices rose more strongly than feared in February. Over the year, the inflation rate rose from +5.5% at the beginning of the year to +6.2%. This was the highest inflation rate since the start of the data series in 1997. According to the statistics office in London, prices were driven primarily by electricity, gas, and services. The Bank of England has already responded to the sharp increase in inflationary pressure with three interest rate hikes.

Because of the sharp rise in the cost of living, the British government announced a temporary reduction in fuel tax. According to UK Finance Minister Rishi Sunak, gasoline tax will be reduced by five pence per liter for a limited period until March 2023, for which the government has budgeted around GBP 5 billion. In addition, homeowners who install solar panels or heat pumps will receive financial relief over the next five years.


Economic Indicators March 24

MEZ Country Indicator Last period
08:45 FR Economic Indicator (March) +112.0
09:15 FR PMI Composite (March) 55.5
09:30 SZ SNB Monetary Policy Decision -0.75%
09:30 GE PMI Composite (March) 55.6
10:00 NOR Norges Bank Monetary Policy Decision +0.5%
10:00 EZ PMI Composite (March) 55.5
10:30 UK PMI Composite (March) -59.9
10:30 SZ SNB Press Conference
11:00 EU Meeting State and Government leaders
13:30 US Initial Jobless Claims (weekly) 214,000
13:30 US Durable Goods Orders (February, m/m) +1.6%
14:45 US PMI Composite (March) 55.9


Earnings Calender March 24

Country Company Period
SZ Zur Rose Annual
SZ Meyer Burger Technology Annual
GE Daimler Truck Annual
GE Heidelberg Cement Annual
IT Saipem Annual
UK Next Annual


LGT helps you make informed investment decisions

All about global economic and market trends at a glance

Subscribe to LGT's research newsletters

You can also follow us on Facebook or LinkedIn – or visit MAG/NET and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, E-Mail:
Source: LGT Bank (Switzerland) Ltd.

Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is for your information only and is not intended as an offer, solicitation of an offer, or public advertisement to buy or sell any investment or other specific product. Its content has been prepared by our staff and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its being correct, complete and up to date. The circumstances and principles to which the information contained in this publication relates may change at any time. Information that has been published should therefore not be understood as implying that no change has taken place since its publication or that it is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax-related or other consulting matters, nor should any investment decisions or other decisions be made on the basis of this information alone. It is recommended that advice be obtained from a qualified expert. Investors should be aware that the value of investments can fall as well as rise. Positive performance in the past is therefore no guarantee of positive performance in the future. Investments in foreign currencies are also subject to fluctuations in exchange rates. We disclaim all liability for any loss or damage of any kind, whether direct, indirect or consequential, which may be incurred through the use of this publication. This publication is not intended for persons subject to legislation that prohibits its distribution or makes its distribution contingent upon an approval. Any person coming into possession of this publication shall therefore be obliged to find out about any restrictions that may apply and to comply with them. In line with internal guidelines, persons responsible for compiling this report are free to buy hold and sell the securities referred to in this report.