A further rate hike at the SNB’s meeting next week is likely to be a fait accompli. A further significant tightening beyond that hardly seems credible though.

A lot can happen until the SNB’s next meeting in September, of course, but in view of the fact that inflation in Switzerland has recently eased more than the SNB had expected and was close to the upper limit of 0-2% at 2.2% in May means that the need for further rate hikes seems limited. Instead, a further fall in inflation is likely to increase the SNB’s tolerance for Franc depreciation so that we see increased possibilities on the upside as regards EUR/CHF.