Barclays Research discusses CHF, and GBP outlooks around tomorrows SNB and BoE policy decisions.
"After the Russian-Ukraine war, however, GBP moves have become one sided for every one of the last four meetings. Most notably, GBP would still rise if the BoE hiked more than expected as a knee-jerk reaction. But as soon as the BoE’s forecasts hit the wire, surprising markets by the bank’s grim outlook for higher inflation and lower growth in the UK, GBP would start to sell off. Within 30 minutes of the meeting, GBP would lose between 0.41 and 0.60% against the EUR, with an average decline of 0.53%," Barclays notes.
"We expect the SNB to deliver a 100bp hike, more than the consensus forecast (50bp) and market pricing (75bp). President Jordan has been hawkish. His Jackson Hole speech outlined reasons for structural risks to a higher inflation. He made further hawkish comments after the ECB meeting. We remain short EURCHF (target 0.95) as the SNB out-hawks the ECB," Barclays adds.