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MNI SNB Preview - December 2022: Hike Expected, But Could Signal Peak Nearing

Executive Summary:

  • Tightening cycle will continue in Q4, with the bank likely to raise rates by 50bps to 1.00%
  • Sell-side analysts are split, with the majority looking for a 50bps hike, but a notable minority looking for either a 25bps or 75bps move
  • Inflation-adjusted FX rate sits below recent highs, opening the possibility of more forceful language on the Franc

Full preview including summary of sell-side views here:

MNISNBPrevDec22.pdf

This quarter, CPI outturns have stopped short of the bank’s September projection, and a persistent plateau into year-end will keep inflation below the bank’s 3.4% forecast – which was seen as a more prolonged peak for prices. As such, a near-term downgrade for the inflation forecast is likely, and will work against any calls to re-accelerate tightening to 75bps clips.

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