SNB Preview: Forecasts from five major banks, new tightening to come

Swiss National Bank (SNB) meets on Thursday, December 15 at 08:30 GMT, followed by a press conference at 09:00 GMT and as we get closer to the release time, here are the expectations forecast by the economists and researchers of five major banks regarding the upcoming central bank's Interest Rate Decision. 

SNB is expected to hike rates by 50 basis points to 1%. At the last meeting on September 22, it hiked rates by 75 bps to 0.5%.

ING

“We expect the SNB to raise its policy rate by 50 bps at the December meeting, leading to a total rate increase over the year 2022 of 175 bps in Switzerland, against probably 250 bps in the eurozone and 425 bps in the US over the same period. Going forward, we expect price growth to decelerate gradually but slowly, remaining above target for the first half of the year, before falling back below 2% by the end of 2023. We expect the SNB to make a final 50 bps hike at its March 2023 meeting, bringing the rate to 1.5% and leaving it there for an extended period. We forecast further nominal CHF appreciation in the first half of 2023.”

MUFG

“Given the SNB only meets every quarter there is a greater risk that we do not get a slowdown in pace and another 75 bps rate hike is possible. But a step down to a 50 bps hike seems more likely given the inflation data is much lower in Switzerland than elsewhere.”

Citibank

“The strong Franc, slowing Swiss economy, falling energy prices but also the shift in emphasis to balance sheet reduction speak against big rate hikes. However, interest rate differentials are already historically wide and with fewer meetings available, the SNB has to make bigger steps to keep up. We, therefore, expect a 75 bps hike this week.”

Credit Suisse

“Our FX strategy base case is the market’s central case of a 50 bps hike. Such a move should be Franc supportive, and we stick with our 0.9500 EUR/CHF end-of-Q4 target.”

Danske Bank

“We expect 50 bps the SNB.”