Widening policy rate differential with ECB suggests CHF weakness ahead, according to economists at CIBC Capital Markets.

SNB to be less activist than ECB 

“Although we expect additional SNB pro-activity, we expect the bank to be less activist than its ECB counterpart.”

“Narrowing growth differentials add to the presumption widening ECB/SNB policy divergence. Policy differential ended 2022 at 100 bps, we would expect that to widen to 150 bps by the end of Q1. Such policy widening points towards EUR/CHF remaining well supported.”

“Q1 2023: 0.99 | Q2 2023: 1.00 (EUR/CHF)”