Reminder: The Swiss 'Vollgeld' vote is this...>

SWISS: Reminder: The Swiss 'Vollgeld' vote is this Sunday. Here's our take on

the referendum we put out a week or two ago:

Switzerland's vote on the 'Vollgeld' monetary reform due June 10th may keep any

near-term CHF rallies capped. While the referendum poses only an outside risk,

it is likely markets have become more hesitant to make assumptions on political

outcomes given the surprises in the UK, US and Italy in recent years. The

macroeconomic impacts of the Vollgeld reforms (the conversion of domestic bank

deposits into liabilities with the central bank) are incredibly unclear and

dependent on the government/central bank response. They would inevitably mean

material changes to the Swiss economy, best summarised by the central bank's

President Jordan: "The initiative raises unrealistic expectations... it is an

unnecessary and dangerous experiment". Opinion polling leaves little chance of

an overhaul of the monetary system, but many traders will have learnt the hard

way not to over-trust surveys in recent years and, as a result, CHF rallies may

be short-lived.