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EUR/CHF: Weekly SNB sight deposit data to show intervention activity - JPMorgan

FXStreet (Bali) - Strategists at JP Morgan note that the weekly sight deposit data release on Monday morning around 8am London time is an important release for EUR/CHF for signs of any intervention activity.

Key Quotes

"With EUR/CHF now perilously close to the business end of the SNB’s 1.20 floor, discussion is naturally turning to how the SNB will go about policing this floor."

"It’s unclear whether the SNB has already been intervening to slow this final descent to 1.20 but if they have been then it might well begin to show upon the weekly sight deposit data that’s released on Monday morning around 8am London time (the counterpart to unsterilized intervention is an increase in liquidity in the banking system, i.e. an increase in the deposits of commercial banks at the SNB)."

"This could thus be quite an important release for EUR/CHF. The sight deposit figures are reported as an average for the week up to Friday, so any intervention activity towards the end of this week may tend to be masked. Nevertheless, we would regard an increase in sight deposits in excess of CHF 1.5bn as material and potentially suggestive of pre-emptive intervention ahead of the floor (the average weekly change in sight deposits from 2013 is CHF 0.4bn, the standard deviation CHF 0.3bn, and the largest singly weekly increase CHF 1.5bn)."

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