Forex Flash: EUR/CHF to target 1.26-1.30; eventually back to the floor - Nomura (Barcelona) - Nomura strategists expect a move towards 1.26-1.30 in EUR/CHF, which "would be consistent with a reduction in eurozone risk premium witnessed over the past year."

Nomura adds: "In terms of flows, with the risk premium roughly halved, this would be consistent with half of the safe-haven deposits (around CHF50bn) being removed. Although some of these outflows may have already occurred, it is more likely that leveraged flows accounted for the bulk of the move last week."

Beyond 1.30, Nomura is not that optimistic, saying that "we would caution against chasing EUR/CHF higher", warning that "the CHF10bn monthly current account surplus and ongoing balance sheet reduction by Swiss banks should eventually see it trade back towards the floor."