Event Guide: SNB Monetary Policy Statement – Sept. 2023

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Heads up, franc traders! Tomorrow, the Swiss National Bank is set to unveil its latest interest rate decision, with expectations that they may raise interest rates once more.

For those considering making moves on the Swiss franc on the event, here are the key points to keep in mind before working on your risk management strategy:

Event in Focus:

Swiss National Bank (SNB) Monetary Policy Statement

When Will it Be Released:

September 21, Thursday: 7:30 am GMT

SNB Chairperson Thomas Jordan will hold a press conference after the announcement.

Use our Forex Market Hours tool to convert GMT to your local time zone.


  • SNB to hike interest rates by 25bps from 1.75% to 2.00%

Relevant Swiss Data Since Last SNB Statement:

🟢 Arguments for Hawkish Monetary Policy / Bullish CHF

  • Swiss Inflation Rate for August 2023: 0.2% m/m (0.1% m/m forecast; -0.1% m/m previous)
  • SECO Swiss Economic forecast for 2023 was upgraded to 1.3% vs. 1.1% previous

🔴 Arguments for Dovish Monetary Policy / Bearish CHF

  • Switzerland’s producer price index slips by -0.2% m/m in August (-0.3% m/m expected, -0.1% m/m in July)
  • Swiss Unemployment Rate for August: 2.0% vs. 1.9% forecast / previous
  • Switzerland’s KOF economic barometer weakened from 92.2 to 91.1 in August, as “the indicators on the employment situation developed negatively” for the month
  • SECO Swiss Economic forecast for 2024 was lowered from 1.5% to 1.2%
  • Switzerland Retail Sales fell by -2.3% in July vs. 1.5% gain in June

Previous Releases and Risk Environment Influence on CHF

June 22, 2023

Overlay of CHF vs. Major Currencies Chart by TV

Overlay of CHF vs. Major Currencies Chart by TV

Action/Results: As expected, the Swiss National Bank raised its interest rates by 25 bps to 1.75%, its fifth hike in a row and the highest level since April 2002. The franc immediately turned lower, suggesting profit taking on the widely expected outcome given that the franc rallied ahead of the event, but also likely on some longs reduction by disappointed traders who thought a 50 bps hike was a possibility.

And it’s also possible the weakness may have been a reaction to U.S. dollar strength dominating the markets after very hawkish commentary from the Federal Reserve a day earlier.

Risk environment and Intermarket behaviors: During this week, those inclined to take risks found themselves in a more cautious mood. This negative shift in sentiment was spurred by central banks’ hawkish response to the ongoing issue of persistently high inflation. Flash global PMI’s came in weaker-than-expected this week, likely contributing to broad risk-off vibes.

As we’ve seen in recent months, these narratives raise traders’ concerns about the potential impact on economic growth, usually prompting risk aversion behavior.

March 23, 2023

Action/Results: SNB hiked interest rates from 1.00% to 1.50% as expected, with Chairperson Jordan citing that they could not rule out additional increases in rates to ensure price stability.

The central bank also did not rule out future currency interventions, leading to a slight pop higher for the Swiss currency after the announcement and onto the next trading sessions.

Risk environment and Intermarket behaviors: Risk-off flows were still very much in play during this trading week, as investors stayed wary of banking sector risks.

In addition, U.S. Treasury Secretary Yellen’s clarification that the government is not considering “blanket insurance” for uninsured deposits sparked worries that smaller bank runs could follow.

On top of the feeble coordinated attempt by major central banks to shore up the sector, this sparked a flight to safety and rally in gold, which benefited the correlated franc early on.

Price action probabilities

Risk sentiment probabilities: Broad risk sentiment bias around the Swiss National Bank’s monetary policy statement will likely be dictated Asia and Europe’s reaction to Wednesday’s monetary policy statement from the Federal Reserve.

And for those who missed it, the Fed held off on interest rate changes as expected, signaled a potential hike again in 2023, and  set expectations of interest rate levels holding above 5% through next year. They also forecasted that the unemployment rate might not rise as much as they thought and inflation might not be as feisty as it seemed back in June.

Overall, the statement was taken as a very “hawkish pause,” and the markets reacted in a pro-U.S. dollar / risk-off manner right away, but those moves were quickly reversed as soon as Fed Chair Powell began his press conference.

This signals that market choppiness is likely ahead, but the broad risk sentiment lean during the upcoming Asia and London sessions will likely be risk-off / pro-USD around Thursday’s big events, including the SNB monetary policy statement.

SNB scenarios

Base case: As mentioned at the beginning of the post, expectations are for a 25 bps rate hike, but based on recent data showing mixed reads (i.e., economic growth may be slowing vs. only a few signs of inflation growth change quickening), the argument isn’t very strong for the SNB to raise interest rates.

Assuming event expectations play out and we’re still in a risk-off environment sparked by Wednesday’s Fed statement, the Swiss franc may draw in buyers around the statement release. Volatility may not really pick up though in that scenario as traders may wait to hear more from SNB Chair Jordan at the follow up press conference.

It’s likely best to wait for SNB Jordan to speak, and IF signals more rate hikes ahead, then we may see the Swiss franc draw in buyers, especially against those currencies that strengthened against it through the first half of the week like the Comdolls.

Alternative Scenario: There’s a possibility that the SNB holds off on raising interest rates given signs of slowdown in Switzerland. If that scenario does play out, that would likely draw initial sell orders from news and fundie traders right off the bat.

If that scenario were to happen AND SNB Jordan signals a rate hike pause for the rest of 2023 (given the relatively low rate of inflation seen in Switzerland), that would probably be enough divergence from expectations to spark a sell off in the Swiss franc. If a risk aversion environment persists, then look for potential short setups against the safe haven currencies, especially the USD as long bias will likely remain there for the rest of the week.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.


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About the Author: Webbey Team

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