Back
3 Jun 2015
SNB expected to remain ‘on hold’ in June – BAML
FXStreet (Edinburgh) - According to analysts at BAML, the SNB would keep its monetary stance unchanged at its next meeting.
Key Quotes
“Assuming a resolution in Greece, the loose SNB stance should allow CHF to gradually weaken in the medium term”.
“Indeed, the negative deposit rate appears to have had some effect already, partially correcting the significant CHF overvaluation following the abandoning of the EUR/CHF floor”.
“Should this lead to at least some capital outflows from Switzerland, this should gradually weaken CHF”.
“We expect the SNB to stay vigilant and act as needed to counter sustained CHF strength, with action becoming more likely if EUR/CHF moves back toward parity”.
“However, we do not expect that the SNB to deliver a policy response in June, preferring to wait-and-see as policy options are finite and dwindling, especially given the large size of the SNB balance sheet”.
“The 1Q GDP data were weak, but we expect the SNB will likely look through this largely anticipated weakness, while recent commentary from the SNB’s Jordan suggested further rate cuts are dependent on the global environment”.
Key Quotes
“Assuming a resolution in Greece, the loose SNB stance should allow CHF to gradually weaken in the medium term”.
“Indeed, the negative deposit rate appears to have had some effect already, partially correcting the significant CHF overvaluation following the abandoning of the EUR/CHF floor”.
“Should this lead to at least some capital outflows from Switzerland, this should gradually weaken CHF”.
“We expect the SNB to stay vigilant and act as needed to counter sustained CHF strength, with action becoming more likely if EUR/CHF moves back toward parity”.
“However, we do not expect that the SNB to deliver a policy response in June, preferring to wait-and-see as policy options are finite and dwindling, especially given the large size of the SNB balance sheet”.
“The 1Q GDP data were weak, but we expect the SNB will likely look through this largely anticipated weakness, while recent commentary from the SNB’s Jordan suggested further rate cuts are dependent on the global environment”.