Switzerland’s central bank is widely expected to leave its benchmark interest rates unchanged Thursday amid the slowing pace of consumer price growth in the Alpine nation.
An economists’ poll predicted the bank will hold its key policy rate at 1.75%.
Flagging consumer price growth in Switzerland sparked an unexpected rate hold in September and has likely ended the tightening cycle at the Swiss National Bank. “The lower-than-expected Swiss inflation in November both shut the door on the idea of further rate hikes and opened the door to rate cuts,” wrote analyst Adrian Prettejohn, at Capital Economics.
Consumer price growth has remained within the SNB’s corridor of 0-2% since June, and it fell to 1.4% last month.
“The average inflation rate of 1.5% over October and November was well below the SNB’s forecast for Q4 of 2.0% and will force policymakers to reconsider whether they really think inflation will rise above 2% next year, as they forecast in September,” Prettejohn noted. “Moreover, the reduction in interest rate expectations in the Eurozone further eases pressure on the SNB to keep their own policy relatively tight.”
The European Central Bank’s last decision in October left interest rates unchanged, and most observers expect policymakers there to begin prepping the market for rate cuts next year due to expectations of weaker inflation and economic growth, the latter of which is not an official consideration at the lender. The bank is scheduled to issue its final decision of the year – another rate hold, according to analysts – at 13:15 GMT Thursday.
Dovish sentiment on the way?
Prettejohn is one of a few analysts who has predicted that the SNB will start cutting rates as early as March. He noted that upside risks to inflation remain, and Swiss central bankers prefer consumer price growth in the lower half of the 0-2% range, so the 1.4% mark set in November is still too high.
Nomura said it expects the first cut next summer, and that policymakers in Switzerland will need to adjust their expectations for consumer price growth. “We think the SNB has been far too pessimistic on inflation and therefore expect downward revisions to its inflation outlook at the upcoming meeting.”
Price growth is expected to near 0% by the end of next year, according to Nomura.” Therefore, we expect the SNB to begin its cutting cycle in June 2024, when it becomes clear the bigger threat is undershooting, not overshooting, the inflation target.”
Nomura joined others in suggesting the bank could change its guidance on forex market activity away from its focus on selling foreign currency: “Due to the further appreciation of the Swiss franc and weaker inflation outturns, we think a softening of this language is likely. Perhaps the SNB will suggest FX sales are no longer necessary or at a reduced pace.”
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var socket;
var assigned_server = 3001;
var distributor_server = 3010;
var publisher_channel = '';
var broadcaster_channel = '';
var remote_ip = '';
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var logging_interval;
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case 'PauseLogging': clearTimeout(logging_interval); break;
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case 'CheckChannelStatus': check_channel_status(msg.data); break;
case 'PlayerLogResponse': player_log_response(msg.data); break;
case 'CloseSocket': close_socket(); break;
case 'RequestMessageSearch': request_message_search(msg.data); break;
case 'RequestMoreMessages': request_more_messages(msg.data); break;
case 'PlayerDisconnectedAnnoucementTimeoutStart': player_disconnected_annoucement_timeout_start(); break;
case 'PlayerDisconnectedAnnoucementTimeoutClear': player_disconnected_annoucement_timeout_clear(); break;
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function reactivate() {
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function player_log_response(data) {
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data_array.respond_to_socket = data.respond_to_socket;
data_array.player_socket_id = data.player_socket_id;
data_array.logs = data.logs;
var msg_string = JSON.stringify(data_array);
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}
function request_message_search(data) {
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data_array.search_term = data.search_term;
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function request_more_messages(data) {
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function check_channel_status(data) {
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else { setTimeout(function() { check_channel_status(data); },500); }
}
function check_channel_status_response(data) {
postMessage({ action: 'CheckChannelStatusReponse', stream_status: data.stream_status.status, onair: data.stream_status.onair, connected: data.stream_status.connected });
}
function join_publisher_channel(data) {
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data_array.php_session_id = data.php_session_id;
data_array.from_react = data.from_react;
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socket.send(msg_string); }
postMessage({action: 'PublisherChannelJoined' });
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function session_static_info(msg) {
set_static_session_info(msg.data);
start_log();
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function connect_to_distributor(msg) {
publisher_channel = msg.data.publisher_channel;
remote_ip = msg.data.remote_ip;
socket = new WebSocket("wss://ws.livesquawk.com/ws"+distributor_server);
socket.onopen = function(event) { request_server_assignment(); };
socket.onmessage = function(event) {
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var data = JSON.parse(msg_string);
switch(data.type) {
case 'server_assignment_response': server_assignment_response(data); break;
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};
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function session_info_interval() {
postMessage({action: 'RequestSessionInfo' });
logging_interval = setTimeout(session_info_interval,logging_interval_time);
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function server_assignment_response(data) {
assigned_server = data.selected_server;
socket.close();
connect_to_assigned_server();
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function request_server_assignment() {
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socket = new WebSocket("wss://ws.livesquawk.com/ws"+assigned_server);
socket.onopen = function(event) {
postMessage({ action: 'VisibleConsole',console_string: "Connected to server "+assigned_server });
console.log("Connected to server "+assigned_server);
postMessage({ action: 'ConnectedToAssigned' });
connected_to_assigned = true;
if (playing) {
postMessage({ action: 'RejoinPlayerChannel' });
}
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socket.onmessage = function(event) {
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if (data.type != 'server_ping') { /* console.log(data.type); */ }
switch(data.type) {
case 'reconnect': postMessage({ action: 'VisibleConsole',console_string: "Reconnected" }); break;
case 'reload': postMessage({ action: 'Reload' }); break;
case 'start_log_response': start_log_response(data); break;
case 'application_refresh_start': application_refresh_start(data); break;
case 'application_refresh_stop': application_refresh_stop(data); break;
case 'player_log_request':
case 'check_channel_status_response': check_channel_status_response(data); break;
case 'PlayerLogRequest':
case 'new_tweet':
case 'new_latest_news':
case 'delete_report':
case 'add_report':
case 'add_ref_doc':
case 'calendar_change':
case 'calendar_insert':
case 'calendar_delete':
case 'new_note':
case 'AppStart':
case 'AppStop':
case 'BroadcasterStarted':
case 'BroadcasterStopped':
case 'added_cme_report':
case 'updated_cme_report':
case 'added_cme_commentary':
case 'updated_cme_commentary':
case 'server_assignment_response':
case 'initial_messages':
case 'message_categories':
case 'more_messages':
case 'matched_messages':
pass_straight_to_post_message(data);
break;
case 'output':
case 'server_ping':
case 'reconnect':
case 'disconnect':
break;
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socket.onerror = function(event) {
postMessage({ action: 'VisibleConsole',console_string: "LS Socket Error" + event.type });
console.log(event);
postMessage({ action: 'LSSocketConnectionError' });
};
socket.onclose = function(event) {
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socket_close_timeout = setTimeout(connect_to_assigned_server, reconnection_delay);
reconnection_delay = reconnection_delay*reconnectionDelayGrowFactor;
connected_to_assigned = false;
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function close_socket() {
clearTimeout(socket_close_timeout);
socket_close_timeout = null;
socket.onclose = function(event) {};
socket.onmessage = function(event) {};
socket.onerror = function(event) {};
socket.close(1000);
console.log('Socket Closed');
}
function pass_straight_to_post_message(data) {
data.action = data.type;
postMessage(data);
}
function join_player_channel(data) {
var data_array = {};
data_array.type = 'join_player_channel';
data_array.player_channel = data.player_channel;
data_array.remote_ip = data.remote_ip;
data_array.username = data.username;
data_array.app_name = data.app_name;
data_array.onair_status = data.onair_status;
data_array.http_referrer = data.http_referrer;
data_array.current_page = data.current_page;
data_array.php_session_id = data.php_session_id;
var msg_string = JSON.stringify(data_array);
if (socket.readyState == 1) { socket.send(msg_string); }
postMessage({action: 'PlayerChannelJoined' });
playing = true;
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function start_log_response(data) {
session_info.session_id = data.log_record_id;
session_info_interval();
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function application_refresh_start(data) {
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function application_refresh_stop(data) {
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function set_static_session_info(data) {
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session_info.browser_name = data.browser_name;
session_info.user_agent = data.user_agent;
session_info.browser_version = data.browser_version;
session_info.cookies_enabled = data.cookies_enabled;
session_info.platform = data.platform;
session_info.player_version = data.player_version;
session_info.stream = data.stream;
session_info.connection_protocol = data.protocol;
session_info.delay_target = data.delay_target;
session_info.session_email = data.session_email;
session_info.remote_ip = data.remote_ip;
session_info.php_session_id = data.php_session_id;
session_info.application_name = data.application_name;
session_info.http_referrer = data.http_referrer;
}
function start_log() {
var session_start_date = new Date();
session_start_time = session_start_date.getTime();
var months = ['Jan','Feb','Mar','Apr','May','Jun','Jul','Aug','Sep','Oct','Nov','Dec'];
var session_start_date_string = session_start_date.getDate() + " " + months[session_start_date.getMonth()] + " " + session_start_date.getFullYear();
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data_array.username = session_info.session_email;
data_array.php_session_id = session_info.php_session_id;
data_array.webrtc_protocol = '';
data_array.session_start_time = (session_start_time/1000).toFixed(0);
data_array.stream_name = session_info.stream;
data_array.session_start_date = session_start_date_string;
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var data_array = {};
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var current_date = new Date();
var current_time = current_date.getTime();
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session_info.curr_delay = (data.effective_latency / 1000).toFixed(2);
session_info.session_length = current_time - session_start_time;
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session_info.jitter = data.jitter;
session_info.packet_loss = data.packet_loss;
session_info.effective_latency = data.effective_latency;
session_info.mean_opinion_score = data.mean_opinion_score;
session_info.restarts = data.restarts;
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data_array.ping_time = session_info.ping_time;
data_array.jitter = session_info.jitter;
data_array.packet_loss = session_info.packet_loss;
data_array.effective_latency = session_info.effective_latency;
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- Benchmark rate forecast to remain at 1.75%
- More downward revisions to CPI projections likely
- Policymakers could soften stance on currency sales
- Rate decision due Thursday at 08:30 GMT / 09:30 CET
- Press conference set for 09:00 GMT / 10:00 CET
By Eric Culp, European Editor
LiveSquawk News
@EricCulpLS
12 December 2023 | 11:10 GMT
Switzerland’s central bank is widely expected to leave its benchmark interest rates unchanged Thursday amid the slowing pace of consumer price growth in the Alpine nation.
An economists’ poll predicted the bank will hold its key policy rate at 1.75%.
Flagging consumer price growth in Switzerland sparked an unexpected rate hold in September and has likely ended the tightening cycle at the Swiss National Bank. “The lower-than-expected Swiss inflation in November both shut the door on the idea of further rate hikes and opened the door to rate cuts,” wrote analyst Adrian Prettejohn, at Capital Economics.
Consumer price growth has remained within the SNB’s corridor of 0-2% since June, and it fell to 1.4% last month.
“The average inflation rate of 1.5% over October and November was well below the SNB’s forecast for Q4 of 2.0% and will force policymakers to reconsider whether they really think inflation will rise above 2% next year, as they forecast in September,” Prettejohn noted. “Moreover, the reduction in interest rate expectations in the Eurozone further eases pressure on the SNB to keep their own policy relatively tight.”
The European Central Bank’s last decision in October left interest rates unchanged, and most observers expect policymakers there to begin prepping the market for rate cuts next year due to expectations of weaker inflation and economic growth, the latter of which is not an official consideration at the lender. The bank is scheduled to issue its final decision of the year – another rate hold, according to analysts – at 13:15 GMT Thursday.
Dovish sentiment on the way?
Prettejohn is one of a few analysts who has predicted that the SNB will start cutting rates as early as March. He noted that upside risks to inflation remain, and Swiss central bankers prefer consumer price growth in the lower half of the 0-2% range, so the 1.4% mark set in November is still too high.
Nomura said it expects the first cut next summer, and that policymakers in Switzerland will need to adjust their expectations for consumer price growth. “We think the SNB has been far too pessimistic on inflation and therefore expect downward revisions to its inflation outlook at the upcoming meeting.”
Price growth is expected to near 0% by the end of next year, according to Nomura.” Therefore, we expect the SNB to begin its cutting cycle in June 2024, when it becomes clear the bigger threat is undershooting, not overshooting, the inflation target.”
Nomura joined others in suggesting the bank could change its guidance on forex market activity away from its focus on selling foreign currency: “Due to the further appreciation of the Swiss franc and weaker inflation outturns, we think a softening of this language is likely. Perhaps the SNB will suggest FX sales are no longer necessary or at a reduced pace.”