SNB keeps the negative-rate joker in hand as ECB’s TLTROs miss estimates 18/9/2014
The FX markets are squeezed by busy eco-political calendar. The Fed hints at steeper rate normalization path, yet repeats that the first action will be taken “considerable time” after the end of the APP. In Switzerland, the SNB choses to keep the negative-rate joker in hand; a good decision in our view given the significantly disappointment at the first round of the ECB’s TLTROs.
Today, Scotland votes for its independence. The yes-no gap remains tight according to latest polls. The referendum results are due early tomorrow morning. The GBP-complex remains range-bound given the uncertainties. Volatilities are expected to shift higher as the first results start flowing in.