With Swiss inflation looking "under control", the SNB could be one to surprise markets in trading this week. And that is something that the Swiss industry are getting anxious about. And they are now being vocal about that ahead of the central bank's policy decision later this week.
Stephan Brupbacher, the director of Swissmem, the association for Switzerland's mechanical and electrical engineering industries, is out saying that:
"Once this legal mandate (meeting inflation objective) is fuilfilled, the SNB also has a mandate to take the economic situation into consideration. And this naturally includes softening the impact of currency shocks for industry. We will never tell the SNB what it should do. Yet, we expect the SNB to take - within its mandate - the situation of the export industry into consideration".
Meanwhile, Swissmechanic president, Nicola Tettamanti, also commented that:
"A major problem for us is when the euro or dollar drops very quickly against the franc. We have probably lost orders that we would have won if the euro was stronger".
Adding that with inflation being where it is now, the onus is on the SNB to do what it can to help exporters.
Well, I reckon a surprise decision this week can definitely spark a decent drop in the franc. Traders are only pricing in the first rate move by the SNB in June. As for this week, there's only ~28% odds priced in currently.
