RENEWABLES: German Wind Output Forecast Comparison

• US EIA: CRUDE OIL STOCKS EX SPR -0.96M TO 422.8M OCT 17 WK
• US EIA: DISTILLATE STOCKS -1.48M TO 115.6M IN OCT 17 WK
• US EIA: GASOLINE STOCKS -2.15M TO 216.7M IN OCT 17 WK
• US EIA: CUSHING STOCKS -0.77M TO 21.2M BARRELS IN OCT 17 WK
• US EIA: SPR +0.82M TO 408.6M BARRELS IN OCT 17 WK
• US EIA: REFINERY UTILIZATION WEEK CHANGE +2.9% TO 88.6% IN OCT 17 WK

• On the bar to negative rates: Chairman Schlegel referred to the meeting minutes in the September Q&A when being asked how close the Governing Board was to cutting into negative territory. Any info in the summary document suggesting the Governing Board seriously considered such a move may prompt a dovish repricing in Swiss STIR. However, the summary document may also signal that the Governing Board was far away from a cut, and that a material shock would have to filter through for them to come close to such a move. This may see a further tapering of remaining easing priced into the Swiss curve.
• On the potential opening remarks signal: In his September opening remarks, Schlegel did not repeat the "undesirable side-effects" and "challenges" associated with negative rates which he mentioned in June, remaining more neutral on the policy outlook. If this was a deliberate choice, two interpretations seem possible: Either, the Governing Board thinks the probability of negative rates has risen marginally since June (or their assessment of the risks associated with them may be lower than previously seen) and, even if they did comment on it in the Q&A, that led them to cut out the comments out of the opening remarks.
• However, the other option is that the Governing Board thinks that negative rates have moved out of focus or are improbable enough that comments in the opening remarks are no longer warranted. The Governing Board was not asked on their rationale here in the September Q&A.
• On FX valuations: The SNB continues to refrain from giving close guidance on CHF levels, but did comment broadly on material moves. Indeed, Schlegel commented that the CHF had appreciated "really a lot" in the aftermath of the US tariffs announced on April 2 this year. Any further info on the Governing Board's views would prove insightful.

Our September meeting review including a rough Q&A transcript is here.

The SNB will publish their inaugural meeting minutes this Thursday at 0830BST/0930CEST.

• The minutes will be a collated document of around "4-5 pages", setting out "various considerations and arguments from the discussion" of the September meeting without attributing them to individual Governing Board members. Specifically, we look out for insight on a) how far away the Governing Board was from cutting rates into negative territory in September, b) if the missing reference to negative rates in the last opening remarks was a deliberate policy signal, and if so, in what direction, and c) the Governing Board's view on CHF valuation at the time of the meeting on September 25th.
• With a cumulative 12bps of further easing being priced into CHF STIR through the September 2026 meeting, we see two-way risk stemming from the minutes release. For the December meeting, OIS markets imply around 1 in 8 odds for a cut into negative territory at typing.