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MNI SNB Preview - September 2024: Further Easing Coming

The SNB is expected to cut its policy rate again, with a 25bp cut to 1.00% most likely.
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MNI (LONDON)

EXECUTIVE SUMMARY: 

  • The SNB is expected to cut its policy rate again, with a 25bp cut to 1.00% most likely, as reflected by analyst and market expectations - but there is a risk of a larger cut.
  • Inflation has further slowed since the June meeting, remaining well below the SNB’s target of below 2% (but not deflation) and below its Q3 forecast.
  • There will therefore likely be a downward revision to September’s updated inflation projection, regardless of it being conditional on a new, lower, policy rate.
  • CHF has seen some volatility since the last meeting, appreciating slightly overall, underpinning the cut narrative and potentially warranting an alteration to FX communications.
  • A dovish tilt on FX policy could provide some basis for reversal after initial CHF strength on the release, assuming the 25bp cut base case materialises.

FOR THE FULL PUBLICATION  PLEASE USE THE FOLLOWING LINK: SNBPreview-2024-09.pdf

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MNI (LONDON)

EXECUTIVE SUMMARY: 

  • The SNB is expected to cut its policy rate again, with a 25bp cut to 1.00% most likely, as reflected by analyst and market expectations - but there is a risk of a larger cut.
  • Inflation has further slowed since the June meeting, remaining well below the SNB’s target of below 2% (but not deflation) and below its Q3 forecast.
  • There will therefore likely be a downward revision to September’s updated inflation projection, regardless of it being conditional on a new, lower, policy rate.
  • CHF has seen some volatility since the last meeting, appreciating slightly overall, underpinning the cut narrative and potentially warranting an alteration to FX communications.
  • A dovish tilt on FX policy could provide some basis for reversal after initial CHF strength on the release, assuming the 25bp cut base case materialises.

FOR THE FULL PUBLICATION  PLEASE USE THE FOLLOWING LINK: SNBPreview-2024-09.pdf