Derived Data That Drive Results
Synopsis:
Nomura has initiated a short position on CHF/JPY with a target of 163 by end-October, driven by Swiss monetary policy divergence and potential SNB interventions.
Key Points:
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Monetary Policy Divergence: Switzerland's SNB has entered a rate-cutting cycle since March due to reduced inflationary pressures. Recent sight deposit data suggest a potential for increased CHF selling interventions if the currency strengthens excessively.
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CHF Strength Concerns: The SNB’s recent actions and the current EUR/CHF level below 0.95 indicate the central bank's concern about CHF strength. This threshold aligns with past interventions and signals the SNB’s intent to manage CHF appreciation.
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Upcoming SNB Speech: SNB President Jordan's upcoming speech on August 29 is anticipated to provide insights into the central bank's stance on CHF. Despite his impending departure, Jordan's comments are expected to signal a bearish outlook on CHF, reinforcing Nomura's bearish position on CHF/JPY.
Conclusion:
Nomura's strategy to short CHF/JPY reflects expectations of continued CHF strength management by the SNB and divergence in monetary policies. The target of 163 by end-October hinges on these macroeconomic and policy developments.
