Kit Juckes, Research Analyst at Societe Generale, suggests that they
don’t expect the SNB to cut rates further this week, because they don’t
have to.
Key Quotes
“With EUR/USD above 1.10 there is no pressure to the downside in EUR/CHF. In January the market was (very) short CHF and building a short EUR position that wasn’t yet very big. That was a recipe for pressure on the floor to build and at the same time, for a huge move once the floor was broken.”
“Now, the market is more balanced, and Euro shorts are being reduced, not built. A rate cut may still be necessary in due course, because the inability of the Swiss financial system to re-cycle excess savings post-GFC hasn’t been resolved, but judging by how unpopular it would be with pension providers, let alone Joe Public, there’s a good chance they do nothing, and that EUR/CHF holds comfortably above 1.0750 and within the recent range.”
Key Quotes
“With EUR/USD above 1.10 there is no pressure to the downside in EUR/CHF. In January the market was (very) short CHF and building a short EUR position that wasn’t yet very big. That was a recipe for pressure on the floor to build and at the same time, for a huge move once the floor was broken.”
“Now, the market is more balanced, and Euro shorts are being reduced, not built. A rate cut may still be necessary in due course, because the inability of the Swiss financial system to re-cycle excess savings post-GFC hasn’t been resolved, but judging by how unpopular it would be with pension providers, let alone Joe Public, there’s a good chance they do nothing, and that EUR/CHF holds comfortably above 1.0750 and within the recent range.”
