Today the Swiss Federal Treasury announced it was to reopen the tender for the 3.0% 2019 bonds. The results will be released tomorrow but this is unlikely to have a significant impact on the CHF. Into European trading and the Franc is once more struggling as the Dollar looks to eke gains ahead of the Bernanke comments due later today.
The FOMC Chairman is due to speak on inflation and as a result the US unit has managed to elicit more than a modicum of support overnight. USD/CHF is currently testing the supply back from 1.2190 to the 1.2200 mark with local dealers reporting stop/loss interest on a break of 1.2205. French and German names are the best of the recent sellers with London dealers reporting good demand on dips below 1.2170. Bids into 1.2160/65 and 1.2150 will once more look to prop on dips.
EUR/CHF has been forced to trade on a choppy footing amid this initial USD/CHF volatility with the cross bought up to 1.6588. However, offers in the EUR cross are seen from 1.6590 back towards the 1.6600 to cap the topside and as a result the price should continue to look heavy and offset the early buyers once the markets get into top gear. Bids here are seen from 1.6570 back to 1.6565 with more support noted into the 1.6550 area.
Option dealers here suggest that the EUR 500mln 1.6600 strikes due later in the week are helping keep a lid on the price with intraday strikes noted below at 1.6450 & 1.6465. Vol activity has been steady amid the latest spot price decline with the front-end of the curve underpinned by the threats to longer-term support at 1.6550.
Yesterday 2-Month R&R's traded at 0.3 for EUR puts in a EUR 200mln per leg ticket while 1-Month prices are now seen at 3.1/3.5. In the back-end, we are hearing that the 1-Year contract was last sold at 3.1 and now remains offered here.
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