SNB FX intervention was likely in much softer pace

The CHF underperformed last week as market expectations for additional SNB easing rose. The data calendar is relatively heavy this week, with manufacturing PMI, CPI inflation and the SNB's FX reserve data being the focus. 

The recent CHF REER depreciation has implied a much softer pace of FX intervention by the SNB recently, a trend that could be soon tested should the SNB forcefully respond to additional ECB easing. 

Market participants expect a modest uptick in PMI data to 50.1 from 49.5 in September and look for a flat CPI inflation print (0.0% m/m and -1.4% y/y), suggesting a likely bottom of annual CPI inflation. 

"A modest path of EUR/CHF appreciation is expected as year-end approaches, with the next trigger point likely coming from the ECB and SNB policy meetings in December. There is high conviction about a pronounced USD/CHF uptrend, a trade that should outperform in risk-on and -off environments", says Barclays.