News & Reports Archives

Bitcoin Surges Past USD 120,000 Creating New Record

Written by IntaCapital Swiss on July 16, 2025. Posted in News & Reports. Leave a Comment

On Monday of this week, Bitcoin blew past the USD 120,000 mark creating a record price and hitting a high of USD 123,205 (up 3.4%) before pairing early gains to trade around the USD 121,600 mark. On the back of this rise, and clinging to the shirt tails of Bitcoin Ether, the second largest crypto token, advanced beyond the USD 3,000 barrier whilst a number of other smaller coins such as Uniswap and XRP also joined the bandwagon. Experts suggest that investor demand has been fuelled by crypto week (14th – 18th July), a term coined by the House of Representatives. Indeed, the House will consider the Clarity Act*, the Anti-CBCD Surveillance State Act**, the Senate’s Genius Act***, as part of Congress’ effort to make America the crypto capital of the world.

*Clarity Act – The Digital Asset Market Clarity Act aka the Clarity Act, is a proposed US law designed to establish a comprehensive regulatory framework for digital assets, specifically clarifying the roles of the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission) in overseeing these assets.

**Anti CBCD Surveillance State Act – This act prohibits unelected bureaucrats in Washington D.C. from issuing a CBDC (Central Bank Digital Currency), that undermines Americans’ right to financial privacy.

***Genius Act – This act refers to the Guiding and Establishing National Innovation for U.S. Stablecoins Act (a stable coin is a digital currency pegged one-to-one against a hard fiat currency, mainly the US Dollar) and is a piece of legislation aimed at regulating stable coins. The act establishes a comprehensive framework for stable coin issuance, custody, and use, including rules for issuers, custodians and digital asset service providers.

Analysts suggest that investor confidence is at a high and will probably stay there for a while especially as congress are considering the abovementioned bills. Post the election of Donald Trump for a second term in the White House, Bitcoin enjoyed a surge but then fell back trading either side of USD 100,000 for a number of months. The policies emanating from the White House did indeed have a negative effect on investor optimism regarding the President’s pro-crypto agenda, however, other U.S. assets that carry risks such as equities have now rebounded to just about their original highs, giving Bitcoin has once the impetus to move upwards.

Interestingly, institutional investors have also jumped on the Bitcoin bandwagon as confidence in the cryptocurrency has dramatically improved because despite the flip-flop chaotic trade policy of the current U.S. administration, Bitcoin has been steadily moving north. Since doubling in 2024 Bitcoin is up circa 30% since January 1st of this year, and last week investors piled into combined US Bitcoin ETFs with inflows of USD 2.7 Billion, furthermore the current rally has also been helped by crypto trades by the bears who all unwound their short positions last Friday. Data released showed those traders who were short of Bitcoin and had to unwind their trades, saw their positions wiped out to the tune of USD 1 Billion.

There are many in the Democratic party who oppose the introduction of the aforementioned bills to Congress, and Senator Elizabeth Warren last week made vocal her concerns regarding the package of bills, stating it could amount to an “Industry Handout”. She also noted that if passed into law, these bills could inject traditional cryptocurrency volatility into mainstream financial markets. Once upon a time, President Trump described Bitcoin as a “Scam”, but a complete U-turn showed him to be the biggest backer of the crypto world. His family are heavily invested in crypto world such as Bitcoin, Stable Coin crypto mining and sensationally the two meme coins $Trump and $Melania. He has promised to make America the crypto centre of the world, and it appears he will be living up to that promise.

Major Banks Have Ditched the Net Zero Banking Alliance

Written by IntaCapital Swiss on July 16, 2025. Posted in News & Reports. Leave a Comment

The NZBA (Net Zero Banking Alliance) was convened in April 2021 by the UN (United Nations) Environment Programme finance initiative and led by banks whose mission statement was to support efforts to align lending, investment, and capital market activities with achieving net-zero greenhouse gas emissions by 2050. Founding luminaries of the banking world were Citigroup, Bank of America, HSBC Group, and NatWest Group and 39 other leading global financial institutions.

However, the NZBA is under pressure, as back in January this year a number of U.S. banks left the group and most recently HSBC Group has followed suit. The general feeling is that the American banks resigned from the NZBA* as they were under pressure from the then President Elect Donald Trump as he was pushing for higher production of oil and gas thus spurring a backlash against the Net Zero climate bodies. A number of pro net-zero activists have accused the banks of pandering to the political pendulum, and their current efforts are to avoid criticism from the then in-coming Trump administration.

*American Banks No Longer with the NZBA – Citigroup, Bank of America, Morgan Stanley, Wells Fargo, Goldman Sachs, and JP Morgan all resigned before 1st December 2024.

Earlier this month, HSBC was the first British Bank to leave the NZBA, with the move perhaps a potential trigger for other British banks to follow suit. At the launch of the NZBA, the then CEO of HSBC Group Noel Quinn said it was “Vital to establish a robust and transparent framework for monitoring progress towards net-zero carbon emissions. We want to set that standard for the banking industry. Industry – wide collaboration is essential in achieving that goal”. Interestingly, HSBC’s new CEO, George Elhedery, confirmed back in late October 2024 that their Chief Sustainability officer Celine Herweijer had been removed from the bank’s top internal decision-making process, the “executive committee”. She subsequently resigned from HSBC shortly after being dropped from the executive committee.

Some experts have voiced little surprise that HSBC has resigned from the NZBA, citing not only have the top 6 US banks resigned but removing Celine Herweijer from her post on the executive committee may suggest that HSBC was taking a different path regarding climate control. CEO George Elhedery was quick to point out it was all part of a restructuring process and reaffirmed HSBC’s commitment to supporting net-zero. In January 2024, HSBC unveiled its first “net-zero transition plan” detailing its strategies to achieve its climate targets by 2050 (downgraded from 2030) plus its investment decisions it aims to undertake to facilitate decarbonisation across various sectors of finance. A number of senior voices in the net-zero world took issue with HSBC accusing the bank of profits at any cost.

Following their net-zero transition plan, the new Chief Sustainability Officer (not on the new Operating Committee) Julian Wentzel said back in February of this year that the bank would take a “more measured approach” to lending to the fossil fuel industry, giving way to concerns to the net-zero world that the bank would row back on its promises.

On HSBC’s website, it is written that targets for cutting emissions linked to their loan book “would continue to be informed by the latest scientific evidence and credible industry-specific pathways, which again bank detractors say is bank-speak for rowing back on its promises. Meanwhile in America, Republican politicians have instructed some banks to testify before the relevant policymakers who have accused them of unfairly penalising fossil fuel producers with their memberships of the NZBA and other similar groups. Experts point to the obvious political pressure put on banks to leave these organisations.

Elsewhere in the net-zero world and almost a decade on from the Paris Climate Agreement (under Trump the USA has withdrawn for the second time) the world’s largest companies who despite on-going promises and climate manifestos are still struggling to meet net-zero goals. A study produced by a well-known body suggests that only 16% of companies are actually on target to meet their 2050 net-zero goals and a well-respected senior voice in the climate control industry has said “to reach 2050 net-zero goals all of us need to move faster, together, to reinvent sustainable value chains using deep collaboration and transformative technologies”.

According to recently released data, global financing of fossil fuel companies has increased in 2024 (an increase of USD 162 Billion to USD 869 Billion) for the first time since 2021 with banks who have left the NZBA among the biggest funders. So where does this leave the NZBA in its efforts to get banks to increase financing for green projects? Obviously, the organisation is sad it has lost the previously mentioned banks but they still today have over 120 members and currently represents about 41% of banking assets.

Whilst some members have increased their fossil fuel financing some have made cuts to their financing with Santander making the largest single reduction in expansion finance (USD 2.2 Billion) and ING came top in terms of overall divestment slashing its annual fossil fuel financing by USD 3.2 Billion compared with their figure for 2023. Experts in the net-zero world say the NZBA is here to stay with many large banks still on the membership roll. Indeed, on April 15th this year in Geneva membership voted overwhelmingly in favour of backing plans to strengthen the support it provides to its members, marking a new phase for the Alliance’s work which is in line with the goals of the Paris Agreement.

In the Crypto World Are Stablecoins About To Become Mainstream?

Written by IntaCapital Swiss on July 16, 2025. Posted in News & Reports, Uncategorized. Leave a Comment

In the cryptocurrency arena, a stablecoin is a digital asset where the value is pegged to a fiat currency such as the US Dollar, the Euro, or the sterling pound. They can also be linked to other assets such as gold and other precious commodities. However, the preferred medium is as previously mentioned, a hard fiat currency thereby keeping its value on a daily basis and not being subject to volatility as can be seen in many other digital cryptocurrencies. Indeed, the stablecoin is being backed by White House and in particular by President Donald Trump and is gaining traction in a number of boardrooms across America. Interestingly a stablecoin launched by Donald Trump’s World Liberty Financial crypto venture, is being used by an Abu Dhabi investment firm for its USD 2 Billion investment into crypto exchange Binance.

Today there are rumours circulating that Bank of America, Uber, Amazon, and Walmart, are thinking about issuing their own stablecoins, whilst PayPal have already issued their own stablecoin PYUSD, which currently has an average daily turnover of circa USD 13.8 Million, (data from CoinMarketCap). Elsewhere, other banks and payment companies such as Mastercard and Visa are starting partnerships and investments to become part of the growing stablecoin mania and as far back as early December 2023, AXA Investment managers announced it had completed its first market transaction using stablecoins. So, what is the driving force propelling stablecoins towards the mainstream?

Proponents of stablecoins suggest that moving the processing of payments outside the global arena, (currently dominated by banks, Visa and Mastercard) may well make such processing cheaper, and the use of stablecoins will allow businesses and their clients/customers to bypass fees* charged by the payment networks. Furthermore, such proponents also suggest that companies/institutions that create their own stablecoins will help protect consumers while at the same time ensuring that the coins are easily redeemable. Regulators have already said that stablecoins must be backed on a one-to-one basis by liquid assets such as treasuries in America, or Gilts in the UK, or gold, or cash.

*Fees – Whenever a customer uses a bank card, it is subject to a transaction charge known as an interchange fee which covers processing costs as well as giving protection against fraud and other risks. The rates for fees are set by the payment networks and can vary from country to country, and data shows that the banks get the lion’s share of the fees which in 2023 for America alone totalled USD 224 Billion.

Donald Trump and his administration are very much in favour of stablecoins and in order to ensure everything moves forward in a proper manner they have created the “Genius Act”. The details of this act are currently being finalised and it will create a regulatory framework whilst at the same time giving the go ahead for banks to enter the stablecoin market. However, stablecoins do have their detractors and among them are central banks who say the coins are a poor substitute for money and whilst they are backed by assets recognised by regulators and the financial markets, they currently still need to be converted into fiat cash for utilisation in many day-to-day transactions. Stablecoins therefore fail as a useable currency as according to central banks the coins fail a crucial test generally referred to as the “Singleness of Money”*.

*Singleness of Money – The BIS (Bank for International Settlements) the BOE (Bank of England) and other central banks and regulators in major capitals of the world have recently expressed doubts over stablecoins as they may undermine the “Singleness of Money”. They define singleness as the principle that all different forms of money must have the same value at all times and be interchangeable at par without cost. Furthermore, the central banks and regulators have pointed out that stablecoins which currently circulate outside of the traditional payment systems trade on secondary markets as bearer instruments, can experience disparities from their pegged value and deviate in purchasing power from their pegged currency.

Other detractors suggest that the payment systems already in place are competitive, highly sophisticated with anti-fraud measures already built into the systems. Furthermore, credit card users are very protective of the “perks” or rewards they get with using their cards such as airmiles, with some experts suggesting that card users will be loath to lose their rewards. Be that as it may, analysts suggest that stablecoins will find their place in society and the financial markets especially in the United States which includes the backing of the President, Donald Trump.

Emerging Markets Debt Could Potentially Hit Record Sales in 2025

Written by IntaCapital Swiss on July 9, 2025. Posted in News & Reports. Leave a Comment

Experts in emerging market debt advise that global issuance volumes in this sector year-on-year were up 20% for Q1 and Q2 for 2025, with issuances growing particularly quickly from the corporate sector. The boom in debt sales have defied missile attacks, an oil market with gyrating prices, and US policy, and tariffs putting a strain on global trade, resulting in a major increase in demand for local bonds who are having their best Q1 and Q2 in 18 years. White House policy has seen the greenback fall circa 11% this year, which has led to a fall in investor confidence resulting in an index of emerging market local debt to return in excess of 12% in the first half of 2025.

Regarding the fall in the value of the US Dollar, experts suggest that this has sent fund managers, asset managers, and the rest of the money managers to look elsewhere for better returns, and as a result, the markets have seen a surge in demand for fixed-income assets in emerging market currencies. Data released shows that hard currency bonds are only up 5.4% in the first half of this year as opposed to 12% as mentioned above in the emerging market arena, all this against the backdrop of the US Dollar having its worst performance since 1970 and falling against 19 of 23 of the most traded emerging market currencies.

Figures released by EFPR data (formerly known as Emerging Portfolio Fund Research) show circa USDD 21 Billion (an unprecedented amount) flowing into EM-debt funds, with some Latin American bonds returning some considerable gains. For example, some Brazilian government bonds have returned in excess of 29% whilst local bonds from Mexico (known as Mbonos) have generated a gain of 22%. Elsewhere, experts suggest that Ghana (Africa’s top gold producer) will, due to short-term borrowing costs falling to their lowest level in three years, resume domestic bond sales later this year.

The following is a part overview of data released regarding the total return year-to-date on emerging market bonds, Brazil Notas de Tesouro Nacional Serie F – 20.2%, Brazil Letras do Tesouro Nacional – 26.0%, Mexican Bonos – 21.7%, Poland Bonds – 19.9%, Hungary Bonds – 19.1%, Czech Republic Bonds 17.8%, Mexican Cetes – 17.4%, Nigeria Bonds – 15.8%, Egypt Bonds 15.0%, Romania Bonds – 14.9%, Taiwan Bonds – 13.8%, South African Bonds – 13.2% and Colombian TES – 12.8%.

Since the beginning of the year, data released shows emerging markets companies and governments having sold USD 331 Billion in debt in hard currencies such as the greenback and the Euro. However, not all future roads to emerging markets fixed income products are paved with gold, as tariff increases may yet put a dent in some country’s ability to issue new bonds. Donald Trump will be reviving tariff targets in the second week of this month, indeed, yesterday the White house announced that letters had been sent to 14 countries informing them new tariffs will be enforced on 1st August this year. The president also has stressed that he will put an additional 10% tariff on any country aligning themselves with “the Anti-American policies of BRICS*”, confirming “There will be no exceptions to this policy”.

*BRICS – Is an intergovernmental agency and is an acronym for Brazil, Russia, India, China, (all joined 2009) followed by South Africa in 2010 as the original participants. Today, membership has grown to include Iran, Egypt, Ethiopia, and the United Arab Emirates and Saudi Arabia, with Thailand, and Malaysia on the cusp of joining. Russia sees BRICS as continuing its fight against western sanctions and China through BRICS is increasing its influence throughout Africa and wants to be the voice of the “Global South”. A number of commentators feel as the years progress, BRICS will become an economic and geopolitical powerhouse and will represent a direct threat to the G7 group of nations. Currently this group represents 44% of the world’s crude oil production and the combined economies are worth in excess of USD28.5 Trillion equivalent to 28% of the global economy.

It is believed by experts that the capture of the “Global South” encompasses all of Africa and South America, and BRICS seemed determined to have their own currency and move away from the US Dollar. President Trump views this as a direct threat to the USA and western Europe and will probably follow through on his threats to BRIC aligned countries. However, as President Trump alienates many of America’s traditional allies, BRICS are positioning themselves to replace the United States in the ground that Trump has ceded. The second half of 2025 will be interesting and over the next few months the markets will see if the increase in fixed-income volumes from emerging markets runs out of steam or goes on to new record highs.

Indian Regulators Come Down Hard on India’s Options Market

Written by IntaCapital Swiss on July 9, 2025. Posted in News & Reports. Leave a Comment

Over the last five years, India’s equity derivatives* market has become the largest in the world, with a daily turnover (including options**) of circa USD 3 Trillion. India’s SEBI (the Securities and Exchange Board of India) has recently become concerned regarding this area of the market, where it feels that certain large participants have been allegedly using manipulative practices through the use of sophisticated technology, thereby gaining illegal profits and thus affecting the market’s integrity.

*Equity Derivatives – A derivative is a contract (e.g. futures, forwards, swaps and options) whose value is derived from the performance of an underlying asset for example, bonds, commodities, currencies interest rates, or in this case equities or stocks and shares. An equity derivative is a financial instrument which derives its value from the performance of the underlying stocks or shares and allows investors to gain exposure to the equity market without owning the underlying shares, and are widely used for hedging, speculation, and investment purposes.

**Options – A financial option is a contract that gives the owner or the holder the right but not the obligation, to buy or sell an underlying asset, (in this case equities, stocks) set at a specific price, (the strike price) on or before a certain date (expiration date). Options are a type of derivative meaning their value is derived from the underlying asset.

The SEBI are currently investigating an American company Jane Street Group over alleged irregularities manipulation of trades in the above market, but according to officials, (who wish to remain anonymous) the investigation will expand to cover wider markets. The markets being investigated are the Mumbai based NSE, (National Stock Exchange of India Ltd.’s) flagship gauge, the Nifty 50*, and BSE (Bombay Stock Exchange) Ltd.’s benchmark Sensex**. The SEBI flagged manipulated and fraudulent trades that mainly took place in the Nifty 50’s weekly options contracts and its underlying constituents in the cash market.

*Nifty 50 – This is India’s leading stock market index and represents the performance of the 50 largest and most liquid companies listed on the NSE. It serves as a benchmark for the Indian equity market and is used by investors and analysts to gauge market trends and the overall health of the Indian economy.

**BSE Sensex – Sensex stands for Stock Exchange Sensitive Index and is one of the oldest indices of India and consists of 30 stocks which are listed on the BSE and represent some of the largest corporations which are also the most actively traded stocks. The BSE is allowed to revise the listing periodically and this usually takes place twice a year in June And December. Sensex is crucial to investors as it gauges market movements and aids understanding in the overall sentiment of the economy and industry-specific developments.

Last week, on Friday, July 4th, 2025, the SEBI through an interim order announced they would be seizing Rupees 48,4 Billion (USD 570 Million) from Jane Street in what they said was unlawful gains made by the company. In consequence, and after an in-depth investigation, the SEBI has barred four Jane Street entities from accessing its securities markets including the confiscation of the aforementioned rupees. Furthermore, the SEBI have accused Jane Street of adopting an “Intraday Index Manipulation Strategy” whereby in early day trading the company aggressively bought constituent stocks and futures thereby pushing up the index, followed by aggressive selling later in the day where the trades were reversed.

The SEBI concluded that the trading actions employed by Jane Street lacked any economic rationale and were designed specifically to artificially move index levels to benefit their trading positions whilst at the same mislead other market participants. Headquartered in New York, Jane Street Capital employs more than 2,600 people in six offices in New York, London, Hong Kong, Singapore, Amsterdam, and Chicago and trades a broad range of asset classes on more than 200 venues in 45 countries. The company totally refutes the allegations.

Is the US Dollar Under Threat Due to the Policies of Donald Trump?

Written by IntaCapital Swiss on July 2, 2025. Posted in News & Reports. Leave a Comment

Donald Trump was inaugurated on Monday 20th January 2025, and since his elevation to the White House, the greenback has lost over 10% of its value against the Swiss Franc, Sterling, and the Euro. Global investors have been turning away from President Trump’s policies, and there is no better measuring stick for their renunciation of his policies than the US dollar. The last time the US Dollar fell so badly was post the Global Financial Crisis 2007 – 2009, when in 2010 the Federal Reserve in order to prop up the economy was excessively printing money.

However, this time around there is no global financial crisis; it is the policies coming from the White House such as expanded global tariffs, the on-going fight between President Trump and the Chairman of the Federal Reserve to push interest rates down, where Chairman Jerome Powell* refuses to budge. Furthermore, there are two further policies which are scaring investors such as the open legal warfare against those who stand up against his policies, and “the big beautiful bill” which has just passed the Senate 51-50, which many experts feel will add to an already massive deficit. These are just a few of the pillars that make up the current administration’s policy and according to the value of the US Dollar are driving global investors away.

*Jerome Powell and Tariffs – On Tuesday of this week, The Chairman of the Federal Reserve Jerome Powell noted that the FOMC (Federal Open Market Committee) would probably have reduced interest rates further without the White House’s policy of expanding global tariffs. He went on to say, “In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. We think the prudent thing to do is to wait and learn more and see what the effect might be”.

Experts suggest that tariffs will put upward pressure on inflation and certainly slow economic growth, and the President continuing to flip-flop on the specifics of levies and halting progress on trade agreements has given much worry and uncertainty on the outlook of the US economy. However, having said that, recently released economic data shows that tariffs have yet to impact prices or the labour market with further data showing that job openings rose in May, the highest level since November 2024.

Interestingly, many market experts, traders, economists, and analysts suggest that Donald Trump and his colleagues are ambivalent to the fall in the US Dollar. When questioned as to whether they support a strong dollar, the answer is always inevitably “yes” but little seems to be done in halting the current decline. Analysts suggest the financial markets feel that the White House is happy to see the US Dollar slide downwards in order to boost manufacturing in the United States.

Such speculation has led some observers to suggest that the President is playing with fire as the cost of financing the government has exploded to over USD 4 Trillion as the budget deficit continues on its path like a runaway train. Financing mainly comes from overseas

investors, and when it comes time sell up and bring their money home, a sliding greenback means they lose money. This, some observers feel, could lead to a vicious cycle where global investors continue to pull their funds out of the USA driving up borrowing costs resulting in further declines in the US Dollar with further economic uncertainty and so on and so on. If overseas investors get a whiff that a declining greenback is government policy the results could be catastrophic for the US Dollar.

As the world’s reserve currency, the US Dollar is already on the decline because at the close of business 2014 data showed the greenback accounted for 65% of global foreign exchange reserves and as at close of business 2024 this figure stood at 58%. However, that said, swift data shows that as recently as August last year the US Dollar is used in 49.10% of global payments and as at December 2024 data shows that 54% of global traded invoices are transacted in US Dollar and 88% of foreign exchange transactions are done in USD Dollars.

Analysts agree that in the near future, the US Dollar will undoubtedly keep its status as the world’s reserve currency. However, if the US Dollar continues to slide it will come under severe pressure from foreign investors, and there are already mutterings coming out of the ECB (European Central Bank) that the Euro could, in a few years’ time, be in a position to take over the mantle of the world’s reserve currency. The US has amassed a debt pile of USD 29 Trillion (100% of GDP) and it’s not stopping, it has lost its last remaining AAA rating and the budget deficit over the past few years has increased to 6% of GDP. President Trump without a doubt will have some short-term problems coming his way, but will things have turned around by the end of his presidency, and what will his legacy be?

Is the Russian Banking System Close to a Systemic Crisis?

Written by IntaCapital Swiss on July 1, 2025. Posted in News & Reports. Leave a Comment

Experts in the Russian banking arena, plus a number of Russian banking officials themselves, have advised that the banking system in Russia is close to a systemic* crisis. A number of officials within the Russian banking community have advised that bad debt on Russian banks’ balance sheets is in the trillions of rubles. Although official figures may mask the extent of the problem, an increasing number of retail and corporate clients are either deferring or defaulting on interest and principal loan repayments.

*Systemic Banking Crisis – this occurs when a significant number of banks within a country experience severe financial distress simultaneously, potentially jeopardising the entire financial system.

A timeline for this crisis of around 12 months is currently being bounced around by economists, experts, and Russian banking analysts. A number of officials have cited the alarm felt by banks over the non-payment of loan interest, as well as the non-repayment of loan principals. Many experts feel that the corporate and retail sectors within the Russian economy are struggling with high interest rates, with the key benchmark interest rate currently sitting at 20%. If circumstances fail to improve, a debt crisis may well spread through the whole banking community.

Experts contend that Russia’s two-tier economy is impacting the private sector as businesses have to contend with rising costs, slower demand, and decreasing prices for exports. On the other hand, huge benefits have been realised by massive state spending on Russia’s war machine and military industrial complexes. What is not well documented is the favourable loans that banks granted to help fund the war effort, and experts are hearing that there is more pressure on Russian banks as they seek repayments for these loans.

Headquartered in Moscow, ACRA is Russia’s rating agency which, in May of this year, warned of a “deterioration in the quality of loan debt”. They also went on to report that 20% of the entire Russian banking capital is tied up with borrowers whose creditworthiness is under severe scrutiny and may be downgraded due mainly to high interest rates. Furthermore, the military war machine’s appetite for more labour has severely impacted this market, resulting in massive labour shortages. At the same time, this has boosted the earnings of those in work, causing inflation to a peak at 10%.

At the recent St Petersburg International Economic Forum, the Russian Economy Minister said, “We are on the verge of slipping into recession”. However, in a speech the following day, President Putin said, “Some specialists, experts, point to the risks of stagflation and even recession. This, of course, should not be allowed under any circumstances”. A number of political experts read this statement as Putin essentially saying this has nothing to do with me, it is officials who need to put this right. However, Russia is in the middle of a credit crunch, with data showing that Russian banks’ corporate loan portfolio is set to decrease by Rubles 1.5 Trillion (USD 19 Billion) in Q1 of 2025.

In mitigation of the credit crunch, and for the first time in three years, the Central Bank cut its benchmark interest rate to 20%, with many experts and analysts saying that the rate is still far too high. However, earlier this month the Kremlin-linked CMASF (Centre for Macroeconomic Analysis and Short-Term Forecasting) said there is an increased likelihood of a run on Russian banks. The CMASF also went on to say that the MOEX (Russian Stock Market) is a good indicator of heightened economic uncertainty, and it experienced a sharp drop after new sanctions threats by President Trump and his taunt that Putin is crazy.

On the sanctions front, President Trump has so far held off on his threats as it appears he really does not want to go to war with Putin – especially through the non-military option of sanctions. However, the European Union is already in discussions about further sanctions on the Russian banking sector, which could negatively impact the sustainability of Putin’s war on Ukraine. However, without further sanctions, the current Russian economy definitely has a negative outlook and, with rising inflation, labour shortages, and declining growth, could severely hamper Putin’s ability to sustain the current war with Ukraine. However, if there is a full-blown banking crisis – all bets are off, and who knows what the Kremlin might do to sustain not only the current war, but the status quo with the Russian population.

Swiss National Bank Cuts Interest Rates to Zero

Written by IntaCapital Swiss on June 23, 2025. Posted in News & Reports. Leave a Comment

On Thursday 19th June, the SNB (Swiss National Bank) announced their benchmark interest rate was being cut by 25 basis points to zero and is now standing very close to a negative interest rate for the first time since 2022. However, the SNB has not ruled out moving the interest rate into negative territory and the Chairman, Martin Schlegel, stressed that such a move would be subject to great deliberation. The current decision has confirmed that the interest rate is the lowest against their global counterparts.

Chairman Schlegel in a radio interview said, “We are aware that negative interest rates are a challenge for many of our stakeholders in the economy. Negative rates also have negative side effects for savers, bankers, pension funds, and so on – we are very aware of that. If we were to lower rates into negative territory, then the hurdles would certainly be higher than with a normal rate cut in positive territory. When questioned about a rate cut at the next meeting on Thursday 25th September 2025, Chairman Schlegel sat on the fence stressing that officials will weigh data and forecasts at that time.

The cut in interest rates by a ¼ of 1% is the sixth consecutive cut by the SNB forced on the bank by the current strength of Swiss Franc which has caused consumer prices to drop for the first time in four years. President Schlegel was quoted as saying, “the SNB is attempting to counter lower inflationary pressure” and went on to stress “We will continue to monitor the situation closely and adjust our monetary policy if necessary. The SNB had indicated back in March of this year that monetary easing was probably finished, but the currency’s role as a safe haven from global economic turmoil forced their hand, and they have hinted that more cuts may be necessary to stop inflows of the Swiss Franc.

Once again President Trump and his tariff policy which has disrupted global trade underscores the impact it has had on Switzerland. Dramatic shifts in policy by the current administration in the United States has certainly deeply worried investors with the result the Swiss Franc has risen to its highest level against the US Dollar, whilst in Q1 of this year inflation was driven below zero for the first time since March 2021. Another option to control the Swiss Franc is intervention in the foreign exchange markets, but this brings political pressure as Donal Trump has already accused Switzerland of being currency manipulators, a statement vehemently denied by Chairman Schlegel.

There is disagreement within the financial markets with some experts suggesting that unless the situation drastically changes between now and September that the current decision to cut interest rates to zero paves the way for a further cut in September pushing interest rates into negative territory. However, countering this argument other experts have said that unless higher tariffs cause a significant downturn in the Swiss economy the SNB were likely to hold at 0.00%. Current bets on another rate cut have been factored in by money markets at 57%. However, Switzerland’s two-year bond yield, which is highly rate sensitive, remains in negative territory, is a sign that financial markets still anticipate a September cut.

Bank of England Holds Interest Rate Steady

Written by IntaCapital Swiss on June 23, 2025. Posted in News & Reports. Leave a Comment

On Thursday 19th June the BOE (Bank of England) held benchmark interest rates steady at 4.25% – 4.00% with the MPC (Monetary Policy Committee) voting 6 – 3 leaving rates on course for a potential cut at the next meeting on August 7th, 2025. Two external members Alan Taylor and Swati Dhingra plus the Deputy Governor David Ramsden preferred a quarter point reduction, however experts had already predicted a 6 to 3 vote in favour of holding rates steady. The money markets taking its lead from a more dovish vote by the MPC increased the odds on further interest rate cuts, priced in a further two ¼ of 1% cuts by June 2026. Interestingly, even before today’s announcement the financial markets had already priced in an 80% chance of a ¼% cut in August.

Governor Bailey warned that the world is in a highly unpredictable space with concerns that the current conflict between Iran (a major oil producer) and Israel could affect energy costs by sending them higher, thus negatively impacting prices by driving them higher. The BOE confirmed it is sensitive to events in the Middle East and their impact on oil prices where prices could be driven higher, which could then negatively impact the UK economy. The BOE noted that since their last meeting in May gas prices are up by 11% and oil had risen by 26%, however service inflation* an important indicator for the BOE fell in April from 5.3% to 4.7%

*Service Inflation – is a component of core inflation (excludes energy and food services) and reflects the rate at which the prices of services are increasing or decreasing in an economy. It helps economists, financial experts, and policymakers understand the underlying persistent inflationary pressures in an economy. Energy and food prices are excluded and can be volatile and subject to short-term fluctuations but are included in headline inflation.

Officials from the BOE noted that inflation is expected to edge higher in the coming months peaking at 3.7% in September from 3.4% in April. Experts have noted that the September figure is higher than the BOE’s benchmark target figure of 2%, however officials suggest that this figure will slowly come down with Chairman Andrew Bailey confirming “rates are on a downward path”. Officials also confirmed that they expect the economy to grow by 0.25% in Q2 of this year and statistics released by the ONS (Office for National Statistics) showed food prices had risen by 4.4% in the year to May2025, and overall goods prices rose by 2.0% the most since November 2023.

Analysis issued by the BOE suggest that officials and policymakers are feeling less pessimistic regarding the impact of Donald Trump’s tariffs on the UK and global economy, a change of opinion from their more pessimistic outlook last month. However, they continue to stress whilst their outlook has changed, uncertainty over trade could still negatively impact the UK economy. The MPC whilst still trying to balance a cooling economy against elevated inflation is finding their work is being complicated by the Israel/Iran conflict and the trade policies of President Donald Trump.

Federal Reserve Hold Interest Rates Steady

Written by IntaCapital Swiss on June 19, 2025. Posted in News & Reports. Leave a Comment

On Wednesday 17th June, and for the fourth straight meeting, the FOMC (Federal Open Market Committee) announced that benchmark interest rates will remain steady at 4.25% – 4.50% with policymakers voting unanimously for the hold, but also indicating that borrowing costs will probably fall between now and the end of the year. However, Federal Reserve Chairman Jerome Powell reiterated along with the FOMC statement that policymakers will wait and see how economic data evolves moving forward.

The FOMC also released a new set of economic forecasts being the first set of forecasts since President Donald Trump announced his tariff programme on April 2^nd this year famously referring to them as Liberation Day. The FOMC’s forecasts show that for the rest of 2025 they expect higher unemployment, weaker growth, and higher inflation, thus by years end unemployment will be slightly up from the previous estimate to 4.5%, economic growth will be at 1.4% down from 1.7%, and inflation at 3% up from 2.7%.

Experts suggest that the Federal Reserve is in a bit of a quandary with higher inflation suggesting an increase in interest rates whilst falling growth suggests a lowering of interest rates to stimulate the economy. President Trump has persistently said the Federal Reserve should lower interest rates and even before the announcement yesterday President Trump referred to Chairman Powell as stupid. However, officials from the Federal Reserve do expect upward pressure on prices as the expanded use of tariffs by President Trump begin to weigh on economic activity.

Analysts suggest that so far the economy of the United States has proved resilient, as in recent months unemployment has held steady and inflation has risen less than expected. However, Chairman Powell has added that officials are beginning to see some effects from tariffs with more to come over the next few months but he did re-emphasise the Federal Reserve’s commitment to ensure price pressure does not become more persistent. Many experts in the financial markets have forecasted a meaningful rise in inflation but Chairman Powell countered with “the jobs market is not crying out for a rate cut” whilst adding that tariffs are an unavoidable cost increase to consumers and businesses.

Chairman Powell’s take on tariffs is that the United States Economy has not yet seen the full effects of tariffs on prices for consumers and has confirmed the Federal Reserve will hang tight until data gives us a better idea of what’s going on. As part of his post-meeting conference with the media he said, “for the time being we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policies”.

That said, experts within the financial markets have said that according to interest rate futures they see a more than 70% chance of a rate cut in September, however some economists suggest that it will take until then to at least see the impact of all of the administrations policies on immigration, spending and the impact on trade. They are therefore at odds with those in the financial markets proving that as tariffs and Donald Trump have become central to the Federal Reserve’s thinking.