Chart of the Week: SNB Forex Intervention
Head of Macro Analysis
Summary: On Thursday morning at 11:30 AM (GMT), the SNB will communicate its monetary policy decision. We expect that interest rates will remain unchanged.
In this edition, we focus on upcoming central bank meetings once again. On Thursday morning at 11:30 AM (GMT), the SNB will communicate its monetary policy decision. Like most analysts, we expect that interest rates will remain unchanged. The fact that the ECB has only lowered its deposit rate by 10 basis points last week substantially reduces the pressure on the SNB to lower its rates.
On the top of that, the SNB now seems to be comfortable with the current CHF exchange rate. According to the latest data, the evolution of sight deposits at the SNB is stable at CHF 591 billion, which tends to suggest that the central bank has reduced its FX interventions or even temporarily stopped them since the last week of August.
Given number of risks that may emerge in coming weeks and could potentially push the CHF higher (Brexit, growth slowdown and US tariffs against Europe following the US victory in Airbus case), the SNB has every interest in keeping ammunition. Lowering interest rates as early as this week would considerably reduce the central bank’s room for maneuver later.
Latest Market Insights
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)