On this day of 2015, the SNB (Swiss National Bank) discontinued the minimum exchange rate of 1.20 EUR/CHF...
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In June, the SNB warned more forcefully about franc appreciation and signalled an increased willingness to intervene. That exceptional language has now disappeared. Three things changed: → Inflation rose to 0.8% in August. The SNB has raised its forecast, though much of the pressure comes from energy prices and a weaker franc rather than persistent domestic inflation. → Growth surprised on the upside. The SNB now expects Swiss GDP to grow 1.5–2% in 2026, up from around 1%. Pharmaceuticals boosted the headline figure, and capacity utilisation remains below average. → The weaker franc is doing some of the easing. It supports growth while lifting import prices, reducing the case for another rate cut. Our take: A December hike looks premature. But if domestic price pressure builds, the first quarter of 2027 could bring the SNB’s next rate increase. The risk of negative rates has receded. The question now is how long zero lasts.
While I like overnight index swaps if one looks at fed fund futures its pricing in three hikes through spring. Source: Bloomberg

