CHF: Nervous markets will keep franc in demand - ING

According to analysts at ING, there is not an obvious catalyst for a EUR/CHF move over this week, although we’ll probably hear more about Italian debt (ahead of the Fitch review on Friday) and perhaps get some fresh inputs from Turkey as well.

Key Quotes

“Local data will see the Swiss KOF survey on Thursday, which has recently stabilised after a sharp decline through the first half of the year.”

“We doubt EUR/CHF will make it much higher near-term given a variety of risks, such as: 1) the variety of EM risks exposed by US sanctions and poor policy choices locally and 2) risks of a US equity correction as the Fed continues to tighten and discussions of Trump impeachment grow.”

“We also note that one of the largest speculative long dollar positions out there is held against the CHF, warning that CHF could end up out-performing the EUR in the event of any broad-based position adjustment.”