Swiss data today has painted a conflicting picture. Growth slowed in Q3 (+0.4% Q/Q & +2.4% Y/Y) and came in under expectation (+0.7% Q/Q & +2.9% Y/Y) while PMI surged (67.0 from the pvs 62.4) and rallied back towards the all-time high. This showed that the mountain economy remains near its peak but the pace of the recovery is now beginning to wane.
There was nothing to suggest the SNB will not hike rates at the December meeting but the outlook for 2007 continues to look overcast at best. USD/CHF pushed to an intraday low of 1.1946 amid the early European Dollar selling but the pair soon rebounded as short-USD positions were cut across the board. The 1.1925 option barriers have remained intact but should the sub1.1945 stops be triggered then a run at this area (and its protection) is eyed.
Looking ahead, US ISM is seen as the key event-risk ahead of the week-end, as dealers ponder the potential for a sub-50 surprise at 15:00 GMT. Bernanke is set to speak in Washington early in the session while Moskow & Lacker comments are due after the European closing bell.
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