Markets' focuses will be on BoE and SNB policy decisions today. BoE is widely expected to keep policies unchanged after expanding stimulus last month. Bank is should be kept at 0.25% while asset purchase target should stay at GBP 435b. Sterling pared back some of this month's gains against Dollar and Euro this week as some traders expected a dovish statement from BoE. However, it should be noted that economic data from UK have been rather solid so far and suggested that sentiments generally recovered after the Brexit referendum. The main concern for MPC members would be the lack of upward pressure in consumer inflation despite depreciation in the Pound since June. Sterling could regain some ground against Euro after the release.
SNB is also widely expected to keep policies unchanged today, with policy rate held at -0.75% and target range for the three month Libor at -1.25% to -0.25%. There was some upward pressure on the Swiss Franc back in June after Brexit referendum in UK but such pressure quickly vanished. EUR/CHF is holding steady in range of 1.08 and 1.10. SNB will likely maintain a neutral stance in the accompanying statement too and leave room for further policy actions. And the meeting would likely be a non-event overall.
GBP/CHF attempted to take out 100% projection of 1.5570 to 1.3412 from 1.4611 at 1.2453 twice since July, but failed. The developments suggests medium term bottoming at 1.2446 but there is no clear sign of momentum yet. Recovery is so far limited by 55 days EMA. The near term focus will be on 1.3119 resistance and break should confirm our bullish view on trend reversal. In that case, further rise should be seen back into resistance zone of 1.3412/4611 before losing momentum again. In any case, we'd not expecting a break of 1.2446 low in near term.
Elsewhere, Australia employment dropped -3.9k in August while unemployment rate also dropped to 5.6%. New Zealand GDP grew 0.9% qoq in Q2, below expectation of 1.1% qoq. Business NZ manufacturing index dropped slightly to 55.1 in August. Eurozone will release trade balance and CPI while UK will also release retail sales. US will release retail sales, jobless claims, Empire state manufacturing index, Philly Fed manufacturing index and industrial productions.