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Swiss franc surges; best of Swedish bond rally is over

Having seen the Swiss franc climb close to a two-year high this week following the flare-up in tensions between the US and Iran, the SNB will surely consider intervening soon – particularly if these geopolitical tensions persist. Nonetheless, with the ECB set to loosen policy later this year, we do not think that policymakers will prevent the franc from strengthening further in H2. Meanwhile, we think that Iceland’s central bank will leave interest rates on hold at its policy meeting meet week.

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