CIBC Research discusses CHF outlook and targets EUR/CHF at 1.11 by end of Q3 and at 1.13 by year-end.
"In view of the persistent CHF overvaluation, and the fact that intervention is the primary policy tool, we expect the SNB to continue to intervene as necessary. After witnessing Swiss sight deposits, a proxy for intervention, decline in the first four months of the year, holdings moved higher in the last couple of months, underlining renewed activity.
"With the SNB set to remain resolutely on hold, we look for widening implied rate spreads versus the USD, encouraging a correction in the recent accumulation of CHF longs, from three month extremes. Look for a positioning reversal to pace a weaker CHF in H2," CIBC adds.