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Analysts at Rabobank point out that as expected the SNB has confirmed steady policy this morning.

Key Quotes

“Policymakers have repeated their threat of intervening in the FX market if needed.   This reflects the fact that the CHF is heavily overvalued.   The strength of the CHF, which has persisted for years, is a function of safe haven flows.”

“The SNB today has commented that the CHF has appreciated noticeably.   The decline in EUR/CHF since the spring can be linked with the sell-off in EM.   While the USD is still higher vs. the CHF in the year to date, the CHF has been pulling back ground over the past month or so.”

“While the SNB could be the last central bank to hike rates this cycle, the Norges Bank has positioned itself as one of the most hawkish within the G10. As expected rates have been lifted to 0.75% this morning from 0.50%, the first hike in seven years.”

“Policymakers, who were unanimous in their decision have indicated that the next hike is likely in Q1 2019.   That said, their tone was not as hawkish as expected.  Their statement is tinged with caution indicating that “the interest rate outlook is little changed from the June 2018 Monetary Policy Report. With a gradual interest rate increase, inflation is projected to be close to the target some years ahead, at the same time as unemployment remains low.”

“Despite the recovery in oil prices to the $80 /b level, Norwegian oil output has been expected to drift lower into the end of next year.   In the first seven months of this year, Norway crude oil production was down -8% y/y, gas production also dropped on a year-on-year basis in this time frame.”