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21 Aug 2015
SNB to remain ‘on hold’ until late 2017 – Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Christin Tuxen sees the SNB keeping the current low rates until late 2017.
Key Quotes
“A Greek relief rally has sent EUR/CHF to post-floor highs. This will be welcomed by an SNB which is (still) on track for a severe miss of its inflation target”.
“Indeed, the SNB needs all the help it can get as the central bank has largely run out of instruments: policy rates (at -0.75%) are already close to a de-facto lower bound, and the SNB does not want its balance sheet to grow much further”.
“In the absence of significant EUR weakness we think the SNB will accept things as they are given its toolbox constraints”.
“Thus we expect the SNB to keep the key policy rates unchanged at -0.75% in September. Pricing is for a gradual normalisation of SNB rates (and no more cuts) as late as 2017; we see this as largely fair. We have upped the near-term forecast and rolled the longer term”.
Key Quotes
“A Greek relief rally has sent EUR/CHF to post-floor highs. This will be welcomed by an SNB which is (still) on track for a severe miss of its inflation target”.
“Indeed, the SNB needs all the help it can get as the central bank has largely run out of instruments: policy rates (at -0.75%) are already close to a de-facto lower bound, and the SNB does not want its balance sheet to grow much further”.
“In the absence of significant EUR weakness we think the SNB will accept things as they are given its toolbox constraints”.
“Thus we expect the SNB to keep the key policy rates unchanged at -0.75% in September. Pricing is for a gradual normalisation of SNB rates (and no more cuts) as late as 2017; we see this as largely fair. We have upped the near-term forecast and rolled the longer term”.