Contrary To UBS' Expectations, SNB Keeps Rates Flate At 0.25%, Rumor Of CHF Intervention As CHF Plunges Over 100 PIPs
Despite UBS' expectation of a 25 bps hike, the SNB kept its rates flat at 0.25%. Yet applying some parallel universe principles, the bank announced that it is lowering its inflation expectations even as it boosted its GDP growth estimate to 2.5% from 2%. This in itself was sufficient to weaken the CHF, although the dramatic move in the currency crosses have led many to believe that Phillip Hildebrand just couldn't take the pressure and decided to sell a few billion of the currency now that FX intervention is the norm. We are waiting to hear if the SNB confirms or denies any intervention this morning.