Even after the strong gains in the franc against the euro and US dollar after yesterday’s SNB rate hike, the Swiss real effective exchange rate is still about 5% below its level in early 2020 when the SNB intervened heavily. Parity with the euro is not an economically-meaningful barrier, and the Bank would probably not be too concerned to see the franc rise to around CHF 0.975 per euro in the near term. The main event next week will be the Norges Bank announcement on Thursday, at which we expect policymakers to hike rates by 50bps (consensus 25bps) and prepare the groundwork for another rate rise at the “interim” August meeting.
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