SNB likely to be on hold for long

Given that the Swiss franc has weakened in recent weeks, there was no need to cut rate further or take other expansionary measures. Exchange rate considerations will continue to dominate Swiss monetary policy. 

The last thing the SNB probably wants to see is a re-strengthening of the CHF. Therefore, at a time when then ECB considers further stimulus, giving a hawkish signal was no viable option for the SNB today. 

"The ECB is expected to extend the asset purchases beyond September 2016 and it could be announced in one of the next policy meetings", says Nordea Bank.

The SNB defines price stability as a rise in the national consumer price index of less than 2% per year. The current rate is -1.4% y/y. The SNB's expectation of inflation turning positive only in 2017 is realistic. Therefore, policy rates will probably remain on hold for long, through to 2017. 

"EUR/CHF is currently expected at 1.08 on a 3- and 9-month horizon, but this will be reconsidered soon, also in light of what the Fed announces later today. In contrast to the comfortable lead held by Syriza up to July 2015, more recent polls signal that Syriza and ND are neck and neck", added Nordea Bank.