Into North American trading and liquidity should thicken. More Asian holidays have been followed by most of Europe taking a May Day rest. As a result, USD/CHF has spent the day so-far trading inside a rough 1.2075/2100 range. Standing supply is in place at 1.2100/05 to cap rallies while more buyers are seen back from 1.2065 to 1.2050/55 to prop dips.
US data in NorAm trading should once more drive short-term spot volatility. April ISM and March Pending Home Sales are due for release at 14:00 GMT before Bernanke speaks in Montana at 15:00 GMT. Local players suggest only a break below 1.20 adds fresh momentum. Looking further ahead, Swiss dealers look to local inflation data due later in the week. Swiss April CPI is expected to have risen by 0.7% on the month but just by 0.1% on the year.
The higher monthly increase is seen as a product of higher shoe and clothing prices while the annualized rate compares to the previous March reading. The data is due on Thursday at 05:45 GMT and should confirm the low inflation outlook the SNB forecasts take into account. Regardless of the results, we at IFR still look for a 25bps hike in Q2.
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