Sep 20 – Economic Events Outlook – What to Expect from Swiss National Bank Today
Arslan Butt • 2 min read
The financial markets are trading sideways despite the release of economic events. Looks like investors aren’t ready to place swing trades until the release of FOMC in the coming week. The Federal Reserve is widely expected to hike the interest rates from 2% to 2.25% on Wednesday, which is why the dollar is likely to remain supported.
Speaking of the economic events, the Swiss National Bank is expected to release the Libor Rate today. Let’s find out what to expect from SNB and its potential impact on USD/CHF.
Watchlist – Key Economic Events Today
Traders, SNB stands for Swiss National Bank and they are responsible for controlling the money supply in Switzerland. Since the SNB only meets 4 times a year, their policy assessment is worth watching to derive the market trends for next 3 months.
Monetary Policy Assessment is the primary mechanism the SNB Governing Board practices to communicate with investors about monetary policy. It includes the result of their decision on interest rates and analysis about the economic conditions that affected their decision. Most importantly, it projects the economic outlook and offers clues on the outcome of future rate decisions.
The Swiss National Bank has held its policy unchanged since it lifted the peg beneath EUR/CHF on January 15, 2015. Since then, it sustains the Libor Rate at -0.75%, deep into negative territory. As per the market sentiment, they are not expected to modify their policy in the forthcoming meeting. However, they may start speaking about an exit plan from the negative interest rate, a move that could heighten the value of the Swiss Franc.
GBP – Retail Sales m/m
At 9:30 (GMT), the Office for National Statistics is due to release the Retail Sales data for the United Kingdom. The retail sales are expected to drop by -0.2% vs. 0.7% previously. Considering the rise in the UK’s inflation rate, can we expect a rise it’s retail sales? I think yes, and the pound can take a bullish turn on a positive figure today.
EUR/CHF – Ascending Triangle Pattern in Highlights
The EUR/CHF is trading at 1.1320 as the European economy remains mixed and the SNB isn’t respecting the 1.2000 peg. The ascending triangle pattern on the 2 -hour chart is suggesting a bullish bias of traders. The market has moved above 50- periods EMA at 1.1265 and now the same level is working as a support.
Key Trading Level: 1.1246
On the upper side, the EUR/CHF is likely to face resistance at 1.1325, which is extended by the triple top pattern. In case of a dovish SNB, the pair is very likely to jump and violate 1.1325 to target 1.14000. While in case of a hawkish tone, the pair may drop to 1.1250. Good luck!