**As seen in Risk In The Week report 03/17/23, subscribe at cablefxm.co.uk/reports
We’re set to hear from the SNB for the first time this year, the last quarterly meeting took place in mid-December when the central bank decided to lift policy by 50bps to 1.0%, in line with market expectations. Over the statement, the central bank said it would not rule out further rate hikes as it tries to ensure price stability. We remind you we have seen 175bps of tightening from the SNB since last year, however, this compares to 350bps delivered by the ECB and 300bps by the Riksbank. We will also be looking for a revision of forecasts from the central bank, back in December, the SNB projected inflation at 2.4% and 1.8% for 2023 and 2024, respectively. On the labour market, they noted that the situation remains positive, however, they labeled the outlook for global economy as “highly uncertain.” Over the presser, Jordan said the central bank will be ready to either buy or sell CHF if needed, such remarks have inspired a boost in the franc as the SNB departs from its historic posture of defending against a highly valued CHF/EUR. More recently, we received news that Maechler is set to leave the board by mid-year. Also, the central bank has been in the center of the recent market turbulence surrounding troubled banks. The SNB stated that it would provide liquidity to support Credit Suisse, which announced it would borrow up to CHF50 billion from the central bank this week. After these events, we saw the ECB hold its ground and continue its tightening campaign as it raised policy rates by 50bps, it would be no surprise if the SNB does the same. The desk at UBS lifted its forecast rate for the Swiss central bank after the release of the most recent inflation figures, they see the SNB delivering a 50bps rate hike in March and warned that a June rate hike could be on the cards. UBS projects a peak rate of 1.75% reached by June, the revision was said to be inspired by higher ECB policy rates.
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