SNB: Minutes Likely to Mirror Bank's Refrain on Guidance (2/2)
Jan-07 12:53
The SNB meeting summary meanwhile is scheduled to follow at 0830GMT/0930CEST.
- At the December meeting, Schlegel refrained from giving forward guidance, drawing attention to the bank’s meeting-by-meeting approach. He gave the impression a move into any direction is not on the table at this stage.
- This is also the tone we expect the meeting minutes to strike. Any commentary suggesting a move may have been contemplated in December would be a clear surprise, and skew CHF short term interest rates directionally.
- The summary pdf document is to be published tomorrow on the SNB website here, a key paragraph to look out for ("the Governing Board concluded that a further easing of monetary policy was not appropriate") was located on page 5/6 last time. SNB FY 2025 results are scheduled to follow on Friday.
Goldman Sachs mirror MNI's view that an SNB hold for the foreseeable future remains the most probable policy action ahead, commenting earlier today on Swiss markets in general:
- "SNB to stay on hold in 2026, leaving the policy rate at 0%. With our FX strategists forecasting a rangebound EUR/CHF next year, further external disinflationary pressures should be limited, allowing some incremental policy space to accumulate throughout the year. This backdrop should support a grind higher in 10y yields to 0.5%, slightly above the forwards"
- "We remain cautious on the inflation outlook. While we do not expect the SNB to reintroduce negative rates, a slower recovery that pushes inflation even lower could limit the extent of any rise in long-end yields and keep them close to current forward levels. Overall, we still expect Swiss rates to remain the lowest in the G10 throughout next year."
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EGB OPTIONS: RXF6 1x2 CS Buyer
Dec-08 12:45
RXF6 128/129.5 1x2 call spread, paper pays 22 for the 1 leg in 3.5k
OUTLOOK: Price Signal Summary - Monitoring Support In Gilts
Dec-08 12:18
- In the FI space, Bund futures remain in a bear-mode cycle following last week’s impulsive sell-off, and today’s bearish start to the week. The breach of 128.67, the Nov 20 low, confirms a resumption of the bear cycle that started on Oct 17. The contract has traded through the 128.00 handle, paving the way for an extension towards 127.57 next, a 2.000 projection of the Nov 12 - 20 - 26 price swing, ahead of the 127.00 handle. Key short-term resistance is 129.55, Nov 26 high. A corrective bounce would allow an oversold trend condition to unwind.
- A bullish short-term cycle in Gilt futures remains intact and the latest pullback appears corrective - for now. A resumption of gains would signal scope for a climb towards resistance at 92.55, the Nov 11 high. A gap in the daily chart has been filled and initial resistance to watch is 91.93, the Nov 27 high. Support to watch lies at 90.53, the Nov 26 low.
FOREX: CADCHF at 3-Month Highs Ahead of BOC/SNB [2/2]
Dec-08 12:05
- EURCAD slipped to a 3-month low on Friday, having held a contained range across November. Despite the 1% move lower, the cross remains 8% higher on the year and a pullback towards prior lows at 1.6000 and 1.5770 should not be ruled out. Russia/Ukraine ceasefire odds in 2026 remain at around 47% despite the consistent headlines surrounding peace talks, perhaps constraining the Euro’s upside, while EZ growth data continues to remain moderate at best.
- With the SNB decision also this week, CADCHF has risen back above 0.5800, a significant chart level across July/August this year. Persisting risk optimism highlighted by the resilience for major equity indices provides a tailwind for the cross, while the recent failure for EURCHF below 0.9200 may continue to frustrate remaining Franc longs. August highs at 0.5899 remain an obvious short-term target for CADCHF.
- RBC say the November labour report cements the decision to hold rates this week and is “consistent with our base case that the BoC will not need to reduce interest rates again through next year”. Separately Goldman Sachs note that several arguments they have made in favour of CAD funding still hold. However, recent data has signalled improvement, and GS see risks to CAD funding should growth data ultimately confirm that the economy has made it through the trough and is on an upward trend.
