That said, the EUR/CHF floor fiasco in 2015 is now an anecdote to never rule out anything in trading.
The incident also involved the SNB but this time around, it is highly unlikely that the central bank will surprise with a rate hike in today's meeting. Sure, the Swiss central bank tends to follow the ECB when it comes to policy changes but now isn't quite the right time as they will have to also try and contain overwhelming flows into the franc amid a sudden pivot.
It's not to say markets aren't expecting a potential shift in mentality by the SNB but timing is everything and it will be a real mess if the SNB communicates one when overall risk sentiment is already on edge and the euro is also struggling in dealing with fragmentation risks at the moment.
I mean, can you imagine how much upside there will be for the franc if the SNB decides to surprise today? That would be something. And it would arguably really be the final straw that breaks the camel's back in markets. Sure, policymakers do not want to be in a situation with runaway inflation but I don't think we are there yet for Switzerland.
Although one can argue that it is their job to get ahead of the curve, the SNB has other priorities to manage and a surging currency is the last thing that they really want to let slip out of their hands after years of meticulous management.
All that being said, we could be offered up hints of a potential pivot to follow in September. In turn, that has the potential to lend itself to franc strength as well later in the day. So, just watch out for that.
