"The franc has been relatively well supported for most of the last few weeks, party on the back of the view that the SNB's aggressive stance with respect to currency intervention drove the central bank's balance sheet closer to unsustainable levels.

However, with inflation remaining extraordinarily low and as the overvalued currency remains the key factor in keeping monetary conditions too tight there seems little scope of price developments stabilising more considerably anytime soon.

Looking ahead we expect the franc to remain a sell on rallies, in particular against the USD and the GBP. We remain long GBP/CHF".