CHF news
USD/CHF: Sell Signal Trageting 0.9560
USD/CHF break below 0.9840/0.98 generates a tech sell signal targeting 0.9690, and 0.9560, notes SocGen.
"It confirms a correction, initially towards 0.9690 and 0.9560, the retracement levels of the rebound," SocGen adds.
On the upside, SocGen thinks that the upper limit of a multi-month descending channel at 0.9940/1.00 is likely to remain a near-term hurdle.
SNB's Zurbruegg: It's possible to cut deposit rate further
Comments from the SNB's Zurbruegg:
- We don't have an exchange rate goal (well at least not anymore they don't)
- SNB has already gone far on deposit rate
- SNB has always said it can intervene in FX
He spoke in an interview with Basler Zeitung.
If you missed it, there were a bunch of incorrect SNB headlines on Friday that threw markets for a loop.
USD/CHF: Franc Strengthens Amid Rising FX Reserves
The greenback was retreating on Tuesday and the pair was trading 0.3% lower during the London session, spotted around ₣0.9675 as the pair had erased some of the day's losses, but kept trading with a bearish bias.
"Foreign currency reserves held at the Swiss National Bank (SNB) rose substantially in May. FX reserves rose ₣14.2 billion - or 2.40% - to an all-time high of ₣602.1 billion. This is the largest increase since January this year (+₣15.4 billion)," Arnaud Masset, market strategist at Swissquote bank said on Tuesday.
The greenback dropped 0.5% against the franc on Tuesday, continuing after Monday's 0.5% decline, which is unusual since the EUR/USD pair has not risen since Monday. The pairs' tight negative correlation suggests that the decline of the USD/CHF pair was induced by Swiss franc gains.
Swiss Deflation Stretches to 19th Mth in May: CPI
Switzerland remained stuck in deflation for the 19th consecutive month in May, data showed on Wednesday, with the headline annual reading meeting estimates.
Consumer prices in the Alpine country gave up 0.4% during the fifth month of the year, the same as in April.
Analysts had expected an unchanged print in May.
Here's why the swissy could be a good Brexit trade?
Rabobank see EURCHF falling to 1.0500 on a Brexit and that's got me thinking.
If the UK votes to leave, EURCHF could fall to 1.05, says Rabobank in a note. A vote to stay will see it push back up towards 1.10.
They also see the swissy performing well if the stay vote is a close one. A move to 1.05 may also bring further policy action from the SNB, with intervention coming before another rate cut.
I should think that most currencies with an EUR tag are going to be at risk if we vote to leave, and CHF is likely to be up there as a big one. I certainly think a big move south is worth a long, just to piggy back on possible intervention.
What we need to be on watch for is EURCHF taking on a strong bid very close to the vote as the SNB may well shore up their defences to try and limit any fallout. It's something we've seen around other events like the ECB March meeting. A small long a couple of days after their June 16th mon pol meeting might take advantage of that into the UK vote.
Something to think about for you CHF traders.
The SNB will be closely watching Brexit scenarios play out
As Brexit fears heighten the SNB will be taking a close interest 13 June 2016
Brexit is the new China and being blamed by everyone around the globe for their own woes and economic uncertainty.
Safe-haven demand for the yen and swiss franc is noticeable as a result and the Swiss National Bank have good reason to be concerned.
If the Leave vote wins the day then expect a flood of more money into CHF as GBP tumbles. We're now seeing GBPCHF down to 1.3626 , lows not seen since 13 April after highs less than 3 weeks ago of 1.4570 with EURCHF also falling in the past few weeks before finding demand below 1.0850 this morning.
Reasons enough for Jordan & Co to have their finger on the intervention trigger and even contemplating further interest rate cuts.
I have no doubt that the SNB will have been in already with a bit of "smoothing" but central banks are not bigger than the market and even Jordan will have learnt that harsh lesson by now. They will breathe a big sigh of relief if Remain prevails but expect them to jump in if the UK leaves and that will help stem the euro outflows as the Eurozone comes under closer inspection for fall-out.
I have been recommending dip-buys on EURCHF for a while now to good effect but this latest move and the Brexit-related connotations give reason for caution.
SNB Sits on Hands Again Due to Capital Flight Fears
The Swiss National Bank (SNB) left monetary policy unchanged again on Thursday, deciding not to cut rates deeper into negative territory due to fears of capital flight.
The risk of a significant cash flight looms over the Swiss economy, as policymakers fear that people might withdraw their funds from banks and move them abroad, which was the main reason why they chose to leave interest rates at -0.75%. However, borrowing costs in the Alpine state still remains the cheapest in the world.
"The gradual improvement in the international environment will also benefit Switzerland. Exports are likely to continue to recover, and this should stimulate corporate investment and have a positive impact on the labour market. The SNB expects the unemployment rate to stabilise in the second half of the year. For 2016 as a whole, it still anticipates real GDP growth of between 1% and 1.5%," the SNB wrote in the monetary policy assessment on Thursday.
Earlier this year, SNB Chairman Thomas Jordan announced that the SNB "will analyze the best response to the Japanese introduction of negative interest rates", while the central bank expects that Swiss inflation will turn positive in 2017.
The latest figures showed that consumer prices in the Alpine country gave up 0.4% during the fifth month of the year, the same as in April, while analysts had expected an unchanged print in May.
Jordan said also that the negative interest rate implemented last January may stay until the end of 2016, while in his speech in May he emphasized the importance of flexible monetary policy in a period of crisis.
Credit Suisse would lower year-end FTSE forecast to 6200 if Brexit poll voters choose Leave
Swiss banking group CS out with a client note 22 June 2016
- would lower end-2016 forecast by 6% if Leave prevails (6600 prev f/cast)
- would cut Eurostoxx 50 futures end-2016 target to 2950 vs 2250 prev
- S&P f/cast cut to 2000 vs 2150
The FTSE yesterday closed +0.4% at 6226.55.
Switzerland ZEW survey expectations June 19.4 vs 17.5 prev
Switzerland ZEW survey expectations now published 22 June 2016
- current conditions 6.2 vs 0.0 prev
The Zentrum fur Europaische Wirtschaftsforschung (ZEW) Economic Expectations Index rates the relative six-month economic outlook for Switzerland. On the index, a level above zero indicates optimism, below indicates pessimism.
Not a price changer but one for general filing/info.
USDCHF 0.9595 EURCHF 1.0815 with the SNB on standby for Brexit fallout.USD/CHF Technical Analysis: Franc Stronger on Brexit, SNB Takes Action
USD/CHF faces strong resistance around ₣0.9830, and buying at dips is a good opportunity.
The pair has recovered sharply after making a low of ₣0.9520. It was trading around ₣0.9740 on Friday noon in Europe.
USD/CHF faces strong resistance around ₣0.9830 and any break above targets ₣0.9870 and ₣0.9900.
On the lower side. a major intraday support can be seen around ₣0.9680 and any break below targets ₣0.9630, ₣0.9580 and ₣0.9550.
Overall bullish invalidation is only below ₣0.9500.
Any break below this level will drag the pair down till ₣0.9445 and ₣0.9370.
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May 2016 Swiss KOF leading indicator 102.9 vs 102.8 exp
The Swiss KOF leading indicator for May 2016