SNB: Policy Rate Passthrough Considered "Effective" - Economic Note
The SNB considers the pass-through of the SNB policy rate to CHF money market rates "effective" according to their Economic Note published today.
- "The pass-through is highest for the SARON and the EURCHF implied rate, whereas it is lower for the unsecured overnight rate and the USDCHF implied rate. We propose three explanations for these variations."
- "First, and importantly, the pass-through of SNB policy rate changes to the SNB’s operational target SARON can be considered complete. This is unsurprising since the SNB actively conducts OMOs in the secured money market."
- "Second, the less complete pass-through to some of the other rates can be explained by frictions that prevent participants from arbitrating differences across segments. One such friction is that some participants do not have access to all the segments."
- "Third, month-end dynamics in the FX swap market—which can coincide with SNB announcements—can imply a less complete pass-through for the USDCHF implied rate. This rate is often subject to downward pressure at the end of the month, which is arguably due to increased demand for US dollars in the FX swap market on dates that are important for banks from a regulatory perspective."
- Full note here.
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WTI TECHS: (K5) Pierces Key Short-Term Resistance
- RES 4: $76.57 - High Jan 15 and the bull trigger
- RES 3: $72.91 - High Feb 11 and key resistance
- RES 2: $70.98 - High Feb 25
- RES 1: $69.33 - 50-day EMA
- PRICE: $69.26 @ 07:18 GMT Mar 25
- SUP 1: $64.85 - Low Mar 5 and the bear trigger
- SUP 2: $63.73 - Low Sep 10 ‘24 and a key medium-term support
- SUP 3: $60.00 - Psychological round number
- SUP 4: $59.40 - 2.00 proj of the Jan 15 - Feb 4 - 11 price swing
Despite recent gains, a bearish trend condition in WTI futures remains intact. However, a key pivot resistance at $69.12, the 50-day EMA, has been pierced. A clear breach of this hurdle would strengthen a bullish theme and open $70.98, the Feb 25 high. For bears, a reversal lower would expose the bear trigger at $64.85, the Mar 5 low. Clearance of this level would resume the downtrend and open $63.73 next, the Oct 10 ‘24 low.
GOLD TECHS: Bulls Remain In The Driver’s Seat
- RES 4: $3106.8 - 2.764 proj of the Nov 14 - Dec 12 - 19 price swing
- RES 3: $3100.0 - Round number resistance
- RES 2: $3079.2 - 2.618 proj of the Nov 14 - Dec 12 - 19 price swing
- RES 1: $3057.5 - High Mar 20
- PRICE: $3013.8 @ 07:25 GMT Mar 24
- SUP 1: $2999.5 - Low Mar 18
- SUP 2: $2964.9/2884.4 - 20-day EMA / 50-day EMA
- SUP 3: $2832.7 - Low Feb 28 and key support
- SUP 4: $2758.3 - Low Jan 30
A clear uptrend in Gold remains intact and last week’s resumption of the bull cycle reinforces current conditions. The yellow metal is holding on to the bulk of its recent gains. Last Thursday’s fresh trend high reinforces the bull theme and sights are on $3079.2 next, a Fibonacci projection. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend and positive market sentiment. Support is at $2964.9, the 20-day EMA.
BRENT TECHS: (K5) Trades Through The 50-Day EMA
- RES 4: $79.98 - High Jan 15 and a reversal trigger
- RES 3: $76.78 - High Feb 11 and a bull trigger
- RES 2: $74.76 - High Feb 25
- RES 1: $73.17 - High Mar 24
- PRICE: $73.12 @ 07:09 GMT Mar 25
- SUP 1: $68.33 - Low Mar 5 and the bear trigger
- SUP 2: $67.87 - Low Sep 10 ‘24 and a key medium-term support
- SUP 3: $66.36 1.618 proj of the Jan 15 - Feb 4 - 11 price swing
- SUP 4: $63.90 2.000 proj of the Jan 15 - Feb 4 - 11 price swing
Brent futures traded higher Monday and the contract is holding on to its recent highs. For now, gains are considered corrective. However, price has breached the 50-day EMA, at $72.83. A clear break of this average would signal scope for a stronger recovery and open $74.76 next, the Feb 25 high. Moving average studies remain in a bear-mode position highlighting a dominant downtrend. The bear trigger lies at $68.33, the Mar 5 low.
