News Of UBS Expectation Of CHF Hike By 25 Bps On Thursday Sends USDCHF Below Parity

UBS came out with a report expecting a hike by the SNB at their Thursday meeting by 25 bps to 50 bps. While most other banks expect no action from Phillip Hildebrand (who was last heard screaming in abject futility at his FX trading desk) one would think the Swiss bank has a better sense than most of what is happening in its home country. The result is an immediate collapse in the USDCHF pair to below parity. The flight to quality is on in full mode as stocks continue to be decoupled from everything. With nobody trading equities, this is to be expected.

Comments

[emsolý]

btw, there's an open vacancy at the SNB's FX desk, as well as at the money market desk...

(cf.  http://www.snb.ch/en/ifor/job/id/job_openings, fx is 4th from top, repo is 1st from top)

[teaddy bearish]

switzerland bitches !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[hedgeless_horseman]

Top three benefits of the job:

They will pay you in CHF!!!!!!!!!!!!!!!!

They will pay you in CHF!!!!!!!!!!!!!!!!

They will pay you in CHF!!!!!!!!!!!!!!!!

[Ragnarok]

When is somebody going to cry uncle?

[FranSix]

I keep wonder whether the $CDN is bound for the same result as the CHF.

The Yen, however is due for a major meltup.

[iota]

Not for the first time either; it's touched below parity 6 months out of 21 since '08. Keeping my beady eye on this one.

[Josephine29]

What is the Swiss National Bank thinking of? No wonder it is looking for some new staff,it plainly needs some new ideas too.

[MakesMeChunder]

The new enthusiasm for European solutions arises from sheer fear. "We have seen the abyss, and it has changed us," says Austrian Finance Minister Pröll. He says that no head of government or finance minister can forget the weekend of May 7-9 this year. Greece stood at the brink of bankruptcy and other countries were starting to teeter. A bankruptcy would have dragged down other countries and possibly torn apart the monetary union. Hundreds of billions of euros had to be scraped together overnight to prevent a continental meltdown. "During these hours," says Pröll, "a new European community was born." 

Europe's politicians now want:

• to set up a system of previously developed and unanimously approved emergency measures that can be taken within hours in the event of a crisis;
• to closely coordinate the economic and budgetary policies of EU members, including effective sanctions for those who break the rules;
• to centrally control the financial markets, their products and their actors;
• to reduce the dramatically growing disparities in the competitiveness of different EU countries, which undermine the monetary union.

in principle, the budget controls -- known in EU jargon as the "European semester" -- are a done deal. This means an "enormous shift of power" from the nation states to Brussels, said Italian Economy Minister Giulio Tremonti, as he summed up the planned measures during a public statement.

Click for entire article from Spiegel Online =>  Crisis Forces Europe to Unite on Financial Reform : More Power to Brussels