Comments from Nordea Markets on the Swiss franc and SNB
The
bank hasn’t changed its tone lately. Its latest message is that the CHF
is "significantly overvalued", which we agree with. The inflation
forecasts were adjusted lower at the recent meeting (17 March), from
-0.5% in 2016 to -0.8%, levels critical enough not to act. This
time intervention is easier, as housing market momentum has been
falling, suggesting extra money supply won’t be a problem at this point.
Note, also, the SNB has been rather passive over the past few quarters,
so they would not see a big trouble to scale up for a change, if
needed. thus remains the best funding currency for example for Emerging Market FX long positions.