Swiss National Bank coming up during Europe time
I posted a couple of previews here earlier on what to expect:
A couple more
Commerzbank:
- The fear of an EM crisis and unresolved trade conflicts have boosted demand for the Swiss franc as a safe haven and caused EUR-CHF to fall below 1.13. As a result it is approaching the level at which the SNB described the Swiss franc as "clearly overvalued" just last summer. We assume, however, that the SNB will not change the wording on the Swiss franc … but will continue to regard it only as "highly valued". This is also supported by the fact that, despite the recent strength of the franc, the SNB apparently did not intervene in the FX market.
- In view of the booming economy and unemployment at prefinancial crisis levels, the SNB is likely to tolerate a slight appreciation of the Swiss franc. The recent rise in the inflation rate to 1.2% plays in the SNB's favour. In view of high oil prices, the SNB is likely to raise its inflation forecast for 2018 again slightly to 1.0%. In addition, the flight into the Swiss franc should ease when it becomes apparent that there will be no crisis in the emerging markets as in the late 1990s. The SNB can easily live with levels around 1.14 in EUR-CHF.
Citi:
- Swiss National Bank (SNB) can look back to another quarter of robust growth, with GDP expanding by 0.7% QQ and inflation averaging above 1% in 2Q. However, the rebound in the Swiss Franc exchange rates and a slowdown in important export markets warrant some caution, in our view. In any case, with the ECB tying its hands through the summer 2019, we doubt that the SNB will hike its policy rate before end-2019.
