Having sold almost exactly CHF100bn of FX since the third quarter of last year, the SNB effectively said that the policy of exclusively selling FX was over. This makes a lot of sense.

Take a look at the SNB's inflation forecasts out to the end of 2026 and you will see inflation at or mostly below 2% over the entire horizon. The SNB can argue that the inflation battle is won and it no longer has a priority of keeping the real CHf stable through nominal CHf appreciation and FX sales.

This looks to be quite a big deal and we think that merits a higher EUR/CHF from current levels. We could quite easily see EUR/CHF reverting to 0.9650 over the coming weeks.