SNB abandons its long-standing line of defence

We argued only last week that the SNB would be comfortable with letting the Swiss franc rise against the euro. As it happens, after the franc pushed through the long-defended CHF 1.05 per euro mark in trading this morning, we didn’t have to wait long to be vindicated. We think that large-scale interventions are unlikely unless the franc pushes towards CHF 1.025 per euro. Meanwhile, Swedish policymakers are all but certain to leave their policy settings on hold at the Riksbank’s scheduled announcement next Thursday, but we expect them to dial down the dovishness a bit.