Well … the financial market planet anyway.

In case you missed it … The Swiss National Bank (SNB) is imposing an interest rate of –0.25% on sight deposit account balances at the SNB (and more here).

MNI have a long article with various analyst comments (summarised & bolded below):

JP Morgan Strategist Paul Meggyesi:

  • Timing “is unexpected and potentially reflects the extent to which the SNB has had to intervene over the past week in response to the growing prospects of sovereign QE in the Euro area and the latest round of EM and market stress”
  • Says “the SNB’s bloated balance sheet severely constrains its capacity to conduct unlimited FX intervention,” and noted “today’s decision to cut rates is likely a consequence of this balance sheet stress”
  • Today’s decision suggests that “the SNB is finally accepting the inescapable monetary logic of its FX target”

Sebastien Galy, senior currency strategist at Societe Generale comments on whether the SNB move is givign us a heads-up for the ECB in January:

  • The move … suggested the central bank “was already active in EURCHF and could anticipate the size of the flows and that it sees a high probability of ECB QE“
  • “Overall, 25 bp gains time for the SNB as euro-Swiss should already be trading below the floor if it was a freely floating currency in a normal cyclical environment (this isn’t)”
  • He saw euro-Swiss trading in a Chf1.20 to Chf1.25 range heading into the Jan. 22 ECB meeting. At some point, if the overall dollar uptrend picks up steam and dollar-Swiss is propelled higher, euro-Swiss could firm further also, potentially towards Chf1.25, based on “competition between funding currencies”

The article is quite lengthy, but ungated, and includes more from UBS, Brown Brothers Harriman and more