STATEMENT
- Prior 0.00%
- Willing to be active in the foreign exchange market as necessary
- Sees 2025 inflation at 0.2% (0.2% prior)
- Sees 2026 inflation at 0.3% (0.5% prior)
- Sees 2027 inflation at 0.6% (0.7% prior)
- Sees 2025 GDP at around 1.5% ( 1.0-1.5% prior)
- Sees 2026 GDP at around 1.0% (1.0% prior)
- Inflationary pressure is virtually unchanged compared to the last monetary policy assessment
- Main risk to the economic outlook for Switzerland is the development of the global economy
- Economic outlook for Switzerland has improved slightly due to the lower US tariffs and somewhat better development globally
- Although US tariffs and trade policy uncertainty weighed on the global economy, economic development in many countries has thus far remained more resilient than had been assumed
- Baseline scenario anticipates growth in the global economy will be moderate over the coming quarters
- US tariffs and trade policy uncertainty could yet weigh more heavily on global economic momentum than ovbserved thus far
- At the same time, however, it cannot be ruled out that the global economy will continue to develop better than expected in the coming quarters
- Full statement here
The Swiss Franc strengthened a bit following the decision as the SNB sounded a bit more optimistic on the economy given the positive developments on the tariffs front.
Given that it was mostly expected and we have the market pricing 0% chances of further rate cuts, the CHF is unlikely to run much on the back of the SNB policy. In fact, the currency has been mostly driven by the changes in risk sentiment.
REACTION
We can see in the chart above, USD/CHF extended the fall into the key support zone around the 0.7980 level following the SNB's decision. The Fed yesterday delivered on expectations too cutting by 25 bps and signalling a higher bar for further rate cuts.
Fed Chair Powell though sounded a bit dovish as he mostly dismissed the inflation risk and put more focus on labour market weakness. That put further pressure on the US dollar.
On the 4 hour chart above, we can see more clearly the key support zone around the 0.7980 level. This is where we can expect the buyers to step in with a defined risk below the support to position for a rally back into the recent highs around the 0.81 handle. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 0.7872 level next.
