Ryan had some great stuff, here: SNB intervention exclusive: Swiss FX traders on lockdown, Jordan the big unknown in SNB gameplan
And, from the weekend, the EUR/CHF threshold has been crucial and needs to remain in place for as long as necessary
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Now, from Nomura (via eFX):
We are edging closer and closer to the 1.2000 floor and SNB intervention is an increasing risk, says Nomura.
“Incrementally easier monetary policy in the eurozone has been pushing EUR/CHF towards the 1.20 floor, and the Gold Referendum (30 November) and the ECB meeting (4 December) may put further appreciation pressures on the Swiss franc relative to the euro,” Nomura argues.
“We think the SNB stands ready to intervene in significant size, although we don’t think the amounts comparable with the 2012 intervention will be needed in the near term. On a six-month horizon, we view the floor as credible, but SNB interest rate action may be required to avoid the need for more permanent FX intervention,” Nomura adds.
Trading Intervention:
1- “In an environment of more permanent intervention, diversification flows may provide support to GBP and CAD on the margin and more unconventional reserve currencies (such as AUD or KRW) as we have seen from the SNB in the past,” Nomura projects.
2- “In terms of trading CHF it is clear that with the SNB floor to continue to remain in place CHF cannot appreciate much more from these levels against EUR. Therefore, we think the risk-reward trade is clearly to be long EUR/CHF, although the price action may remain around these levels as it was in mid-2012, when the SNB were actively intervening,” Nomura advises.
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More investment bank research and trade recommendations are available at eFX
