SNB to cut interest rates further into negative territory

If the ECB re-starts QE next year, as we think is likely, the resulting upward pressure on the Swiss franc would stoke deflationary fears at the Swiss National Bank (SNB) and prompt a policy response. We expect the SNB to step up its currency interventions at the end of this year, and ultimately cut the sight deposit rate further into negative territory, from -0.75% to -1.00%, in mid-2020.