We expect no action from SNB today following the 'light easing menu' from the ECB (previously we expected a 10bp cut). Following the ECB meeting, EUR/CHF jumped and pricing that the SNB should cut near term was greatly reduced. That said, if SNB keeps the powder dry today there is a downside risk to EUR/CHF near term, but given that the cross remains in the high end of the SNB 'comfort zone', we believe SNB will continue to use intervention as the first line of defence against any unwarranted CHF strength.
Bank of England's Monetary Policy Committee is also meeting today. We expect BoE to remain on hold, hence focus will be on the communication about the latest financial developments. After the ECB disappointed the market last week, downward pressure on EUR/GBP has eased, which should calm the MPC members somewhat. However, the recent decline in the oil price and current poor risk environment will weigh substantially on BoE's overall assessment, thus increasing the odds that the Bank of England is likely to maintain a fairly dovish stance today.
Finally, ECB's Coeure, Weidmann and Liikanen will all speak today. Yesterday, Nowotny reiterated the message from other ECB members that market expectations before the ECB policy meeting were 'absurd'. Given the already considerable number of ECB speeches following the monetary policy decision last week, we do not look for much new information from the ECB members today.
In Scandi markets focus will be on inflation in Sweden, Norway and Denmark. Danmarks Nationalbank will publish the Q4 15 Monetary Review and the Financial Stability Report for H2 15, see Scandi Markets.
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