SNB presser underway

  • depreciation of euro vs other major ccys confirms removing the cap was necessary
  • even after mild ECB rate cut Swiss and Eurozone interest rate differential remains significantly wider than at start of 2015
  • diverging mon pol stances in major ccy areas present huge challenges for small economies like Switzerland
  • introduction of sovereign money would be risky experiment

Earlier the SNB left rates on hold and had these forecasts

USDCHF and EURCHF both trading higher after the earlier wobble with the dip demand I expected here and here

SNB's Zurbruegg:

  • CS and UBS have improved capital situation further since June report
  • new "too big to fail" rules in Switzerland are essential given the issue is pronounced
  • SNB will continue to play an active role in finding a lasting solution

SNB's Maechler:

  • negative interest rate is key instrument of mon pol
  • currently CHF 170bln, 40% of sight depos, subject to negative rate

Nothing new in the emphasis on neg rates as I highlighted in my preview