Economists at Commerzbank do not expect the Swiss National Bank (SNB) to hike today. Subsequently, the franc could see come under appreciation pressure.
Why act if it is not strictly necessary?
“We do not expect a rate hike. This is likely to put appreciation pressure on the franc, and why would the SNB risk that if it isn’t strictly necessary? The inflation rate for domestic goods stands at 1.5% and core inflation at 1.7%. That means price pressure is not high everywhere yet. As a result, the SNB might take some more time before hiking its key rate and might at least allow the ECB to take the first step.”
“No doubt the SNB will send out clear signals today indicating that the lift-off in Switzerland is imminent. Negative interest rates are clearly no longer justifiable under the current conditions. The market might nonetheless seem disappointed today if the SNB does not hike its key rate. However, external factors are likely to soon regain control again, determining the franc’s exchange rates once again.”