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Swiss National Bank meet this week, a 100bp rate hike on the table – CHF impact

Summary:
SNB monetary policy meeting preview The SNB policy decision is due on Thursday (see for timings) Via MUFG Bank: CHF has been the top performing G10 currency so far this month as it has strengthened sharply against both the EUR (+2.2%) and USD (+1.5%). It has regained upward momentum against our equally-weighted basket of other G10 currencies after a period of consolidation at higher levels between July and August. The CHF’s renewed upward has once again coincided with an abrupt hawkish repricing of SNB rate hike expectations similar to in June. Market participants are increasingly confident that the SNB will continue to play catch up with major central banks and deliver a larger 100bps hike in the week ahead (Thurs) to combat upside inflation risks. There are

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Swiss National Bank meet this week, a 100bp rate hike on the table – CHF impact

  • SNB monetary policy meeting preview

The SNB policy decision is due on Thursday (see for timings)

Via MUFG Bank:

  • CHF has been the top performing G10 currency so far this month as it has strengthened sharply against both the EUR (+2.2%) and USD (+1.5%).
  • It has regained upward momentum against our equally-weighted basket of other G10 currencies after a period of consolidation at higher levels between July and August. The CHF’s renewed upward has once again coincided with an abrupt hawkish repricing of SNB rate hike expectations similar to in June.
  • Market participants are increasingly confident that the SNB will continue to play catch up with major central banks and deliver a larger 100bps hike in the week ahead (Thurs) to combat upside inflation risks. There are currently 86bps of hikes priced in. The SNB has also become more tolerant of currency strength since their last policy meeting in June as it provides another channel to help dampen upside inflation risks.
  • The CHF appears well positioned to extend its recent advance, especially against other high beta G10 currencies.

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