Market pricing in a further rate cut 11 July 2016
The likelihood of the Swiss National Bank cutting its deposit rate has almost doubled following Brexit.
Three-month Swiss Libor futures for September imply an 80% chance of a 25 bp cut by that time compared to 44% on June 23, the day of Britain's referendum vote on EU membership. The SNB have repeatedly said that rates could ease further, albeit with limits, in addition to intervention something which Thomas Jordan noted again at the weekend.
"In principle, you can always take monetary policy further. Lower rates even more or increase money supply. This goes for the SNB too, which is focusing in particular on countering the pressure on the franc,"
Relative EUR stability though has helped ease a few post-Brexit fears so far and USD demand, along, with more than a little help from themselves of course, has kept the franc from appreciating too far so in my view as rate cut is not a certainty until those two areas of current focus change.
