Swiss Franc: Swiss data supports dip-buying case – Societe Generale
Societe Generale strategists note Swiss August Consumer Price Index (CPI) and second-quarter Gross Domestic Product (GDP) surprised to the upside, triggering profit-taking in EUR/CHF and USD/CHF but leaving Swiss National Bank (SNB) policy expectations unchanged.
Societe Generale strategists highlight Swiss August CPI and Q2 GDP exceeding expectations, leading to profit-taking in EUR/CHF and USD/CHF. They maintain SNB policy expectations are unchanged despite the market reaction. Wider G10/SNB rate differentials and low FX volatility could prompt EUR/CHF dip-buying, while French fiscal and political risks may revive CHF strength.
Swiss August CPI and Q2 GDP surprised to the upside, but this does not alter SNB policy outlook. Inflation is at 0.6% so far in Q3, in line with June forecasts, and is expected to initially rise slightly before declining in the first half of 2027. EUR/CHF and G10/CHF dip buyers may be encouraged by these factors, but the main risk is the reversal of the inverse correlation between CHF and the 10y OAT/Bund spread.
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