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CHF Slips as CPI Short of Forecast

  • An early dip in the EUR is maintained headed through to NY hours, with EUR/USD edging back below the 1.09 handle to narrow the gap with the Friday open.
  • CHF came under some light pressure on the back of softer than expected domestic CPI data (the M/M & Y/Y readings missed wider exp. by 0.1ppt), but both EUR/CHF & USD/CHF remain comfortably within their recently observed ranges. SARON futures run little changed to 4bp richer post-data as the readings see the Y/Y CPI print back within the SNB’s tolerance band for the first time since early ’22.
  • Still, with the SNB's latest CPI forecasts above target (+2.2% in 2023 & 2024 and +2.1% in 2025) and the bank wary of second-round/offshore inflationary impulses, further rate rises cannot be ruled out.
  • JPY trades similarly weak, with USD/JPY within striking distance of the cycle high posted last week at 145.07. Strength through here would open the best levels since November last year, and the 2.0% 10-dma envelope at 146.47.
  • An early close in the US should keep activity and volumes muted into the second half of the session, although the June Manufacturing ISM will take focus ahead of this Friday's payrolls release. Markets look for the ISM to remain below 50.0, but improve to 47.2 from 46.9 on the headline. ECB's Nagel is the sole central bank speaker of note, apearing in Frankfurt at 1300BST/0800ET.
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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