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16 Sep 2015
SNB Preview: Rates on hold and a dovish tone – Rabobank
FXStreet (Córdoba) - On Thursday the Swiss National Bank (SNB) will have its monetary policy meeting. According Analyst Emile Cardon at Rabobank the central bank will keep rates unchanged and it could make some revision to GDP projections. They expect a dovish tone from the SNB.
Key quotes:
“After the contraction in the first quarter, the second quarter in Switzerland turned out to be much better than expected (0.2% QoQ versus -0.1% median expectation among market participants). This means that Switzerland avoided a technical recession.”
“Tomorrow the SNB will convene. What can we expect? Rates will very likely remain on hold, but some revisions in the economic outlook could be made. As the first quarter has been better than expected, we do not exclude the possibility that the economic growth forecast (1% in June) for 2015 will be revised slightly upwards.”
“On the other hand, since June the international environment has worsened, mainly stemming from tensions after the weakening of the yuan. Inflation expectations will be revised downwards, mainly due to the fall in oil prices (and other commodities).”
“In summary, we expect a dovish tone from the SNB, with Thomas Jordan repeating that the central bank is ready to do more, if necessary.”
“There is a good possibility that the ECB will expand its future asset purchase programme, which could trigger more action from the SNB by the end of this year. First, via additional asset purchases and at a later stage by employing the interest rate tool (lowering the rate on sight deposits to -1% or even -1.25%).”
Key quotes:
“After the contraction in the first quarter, the second quarter in Switzerland turned out to be much better than expected (0.2% QoQ versus -0.1% median expectation among market participants). This means that Switzerland avoided a technical recession.”
“Tomorrow the SNB will convene. What can we expect? Rates will very likely remain on hold, but some revisions in the economic outlook could be made. As the first quarter has been better than expected, we do not exclude the possibility that the economic growth forecast (1% in June) for 2015 will be revised slightly upwards.”
“On the other hand, since June the international environment has worsened, mainly stemming from tensions after the weakening of the yuan. Inflation expectations will be revised downwards, mainly due to the fall in oil prices (and other commodities).”
“In summary, we expect a dovish tone from the SNB, with Thomas Jordan repeating that the central bank is ready to do more, if necessary.”
“There is a good possibility that the ECB will expand its future asset purchase programme, which could trigger more action from the SNB by the end of this year. First, via additional asset purchases and at a later stage by employing the interest rate tool (lowering the rate on sight deposits to -1% or even -1.25%).”