12 Jun 2015
SNB expected to hold rates steady in June meeting – Nomura
FXStreet (Barcelona) - FX Strategists at Nomura, expect SNB to keep policy unchanged in its 18th June meeting, with the central bank expecting the Swiss data to pick up in the later part of the year.
Key Quotes
“We expect no changes to the 3m Libor target of -0.75% or the width of the -1.25% to - 0.25% corridor at next week’s (18 June) SNB quarterly monetary policy meeting. Recent comments from SNB policymakers have made it clear that they view the recent developments in the data to be a “one-offs” with the potential for the data to pick up in the latter part of this year.”
“As EUR/CHF is only 1.5% lower than it was at the March meeting and the recent CPI numbers are roughly in line with the previous SNB forecasts we see no reason for it changing its “on hold” stance for now. The path of EUR/CHF will continue to be heavily dependent on foreign yields, especially euro area yields, where their recent high volatility may discourage the CHF carry trade for the time being, but higher global yields should improve the attractiveness of the CHF carry trade in the medium term.”
“We are currently flat-trading CHF, but are looking for a good entry point for CHF short positions against EUR and/or USD and any disappointment from the SNB may provide good levels to enter.”
Key Quotes
“We expect no changes to the 3m Libor target of -0.75% or the width of the -1.25% to - 0.25% corridor at next week’s (18 June) SNB quarterly monetary policy meeting. Recent comments from SNB policymakers have made it clear that they view the recent developments in the data to be a “one-offs” with the potential for the data to pick up in the latter part of this year.”
“As EUR/CHF is only 1.5% lower than it was at the March meeting and the recent CPI numbers are roughly in line with the previous SNB forecasts we see no reason for it changing its “on hold” stance for now. The path of EUR/CHF will continue to be heavily dependent on foreign yields, especially euro area yields, where their recent high volatility may discourage the CHF carry trade for the time being, but higher global yields should improve the attractiveness of the CHF carry trade in the medium term.”
“We are currently flat-trading CHF, but are looking for a good entry point for CHF short positions against EUR and/or USD and any disappointment from the SNB may provide good levels to enter.”