Via Bloomberg:

  • More than 60 percent of economists in a Bloomberg News survey say SNB President Thomas Jordan will have to use negative interest rates to buttress the ceiling if ECB quantitative easing threatens the threshold.
  • All but one of the 27 economists surveyed forecast the SNB will step up interventions should pressure on the cap intensify, according to the poll conducted Dec. 4-8
  • Seventeen see it introducing a negative deposit rate, following the ECB’s June move to charge banks for overnight deposits
  • With permanent excess liquidity in the Swiss financial system exceeding 300 billion francs ($307 billion), negative rates would have a bigger impact in Switzerland than they did in the euro area, according to SNB Board Member Fritz Zurbruegg

According to Jordan Rochester, an economist at Nomura International Plc in London:

  • “The SNB are in a trade-off here
  • It’s “between a proactive decision of cutting rates before ECB action, or kicking the can further down the road and saving ammunition in case they need to relieve pressure on the floor if the ECB does commence quantitative easing”

Long story, short … expect the SNB to use currency intervention as the first line of defense, but in the event of broad QE by the ECB the SNB is likely to introduce a negative deposit rate

More at the link