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Needle Still Points North


Bearish Correction Still In Play

MNI BRIEF: SNB Payouts Cannot Be Taken For Granted - Jordan

Executive Summary:

  • The SNB kept policy unchanged, with the Sight Deposit Rate and main Policy Rate at -0.75%.
  • The Bank retained their view that the CHF is "highly valued" but moderated their FX intervention language
  • Marginal shifts higher for inflation and growth forecasts, but CPI seen below target across the forecast horizon
Full article here:


The SNB kept policy unchanged in June, with the board looking to further ensure price stability and add "ongoing support to the Swiss economy in its recovery". They retained their language around the CHF, describing the currency as "highly valued", but declined to re-introduce their previous missive that they would intervene "more strongly" despite the CHF strength seen March's decision.

Figure 1: SNB bump CPI forecasts higher, but still expected to remain subdued across the forecast horizon

The SNB joined other global central banks in forecasting near-term upward pressure on inflation, resulting in Y/Y Swiss inflation rising to 1% in Q4, the highest rate since mid-2018. The Bank sees inflation being driven by higher oil prices, strong price rises for tourism-related services and supply bottlenecks as the economy recovers from COVID restrictions. Nonetheless, these price pressures are seen fading from end-2021, with CPI seen below target across the entirety of the forecast horizon.

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