You’ll not be shocked to learn (from the price action) that there’s bids at 1.2015 and traders are noting bids all the way down to the 1.2000 level. Some are calling them official and others not.
SocGen have run a survey noting that most investors are long EUR/CHF and continue to buy the dips, targeting 1.2500.
Form 63 survey respondents;
- 68% think that the gold referendum won’t pass
- 62% think the SNB will go negative on rates in Q1 or Q2 2015
One thing we can be sure of is that the SNB aren’t going to give anyone a free lunch ahead of the referendum. They will not come in and bid it up only for it to get sold again on referendum nerves. They’ll sit on the bid down here and just soak it all up. We may get a pop if we get official news that they are buying but that may not last for the reasons I’ve just explained. On referendum day, if the vote goes their way then they still won’t intervene to push it up as the market will do it for them.
I can see us ending November with the vote going in the SNB’s favour, trading back up towards 1.21, and then hearing that they didn’t actually buy a single Rappen.
Just to counter that somewhat, the market may well get very edgy heading into the weekend. If there is someone lurking who want’s to take on the SNB then they could well try some funny business when markets open Sunday night.
In the meanwhile bids at 1.2015 have seen off the selling as we rocket to 1.2019
