ING Bank: Swiss inflation exceeds expectations, demand for Swiss franc heats up

(1) ING stated that the euro fell sharply against the Swiss franc yesterday, as Switzerland’s October inflation rose by 1.5% year-on-year, higher than expected. (2) This has led the market to question whether the Swiss National Bank can indeed avoid tightening policy throughout 2027 as sources have claimed. (3) Swiss National Bank President Schlegel will speak tomorrow at a Swiss National Bank observers' meeting, and the market should be able to hear more relevant remarks. (4) The bank believes that a more hawkish Swiss National Bank is clearly positive for the Swiss franc, and traders will remember that in 2023 the Swiss National Bank actively pushed the franc higher and used foreign exchange intervention as one of its tightening tools. (5) The bank expects market interest in the Swiss franc to increase further in the coming months, and forecasts downside risk for euro/Swiss franc.