After the contraction in the first quarter, the second quarter in Switzerland turned out to be much better than expected (0.2% QoQ, instead of the -0.1% median expectation). This means that Switzerland avoided a technical recession. The latest signals are cautiously positive as well, with the purchasing managers' index above the 50-handle.

Although the Swiss franc has pared a large part of its gains vis-à-vis its major counterparts, a majority of market participants expects the SNB to cut rates further.

"We  expect the SNB to cut rates by 25 basis points on 10 December, but think that there are certain boundaries to what the SNB could do and we think that the central bank will not go further than -1.25% in the near future. The only available channel left would then be the FX purchase channel", says Rabobank.