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SNB left its policy rate unchanged at 0.00%, as widely expected, and reiterated its readiness to intervene in foreign exchange markets if necessary. The hold reflects the bank’s assessment that current conditions do not justify a shift, even as inflation undershot expectations.

In its statement, the SNB noted that inflation has been slightly weaker than anticipated in recent months, but emphasized that medium-term pressures are “virtually unchanged” compared with September. The conditional inflation forecast is marginally lower in the near term but shows little change beyond that. The Bank now sees inflation averaging 0.2% in 2025, 0.3% in 2026 and 0.6% in 2027, based on the assumption of a 0% policy rate throughout the forecast horizon.

The economic outlook for Switzerland has "improved slightly", helped by reduced U.S. tariffs and a modestly better global backdrop. SNB now expects GDP to grow just under 1.5% in 2025 and around 1% in 2026, though it cautioned that unemployment is likely to edge higher.

Full SNB statement here.

The Swiss National Bank is leaving the SNB policy rate unchanged at 0%. Banks' sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold. The discount for sight deposits above this threshold still stands at 0.25 percentage points. The SNB remains willing to be active in the foreign exchange market as necessary.

Inflation in recent months has been slightly lower than expected. In the medium term, however, inflationary pressure is virtually unchanged compared to the last monetary policy assessment. The monetary policy helps to keep inflation within the range consistent with price stability and supports economic development. The SNB will continue to monitor the situation and adjust its monetary policy if necessary, in order to ensure price stability.

Inflation has declined slightly since the last monetary policy assessment. It decreased from 0.2% in August to 0.0% in November. Lower inflation in the hotel industry, as well as for rents and clothing, contributed in particular to this decline.

Inflationary pressure in the medium term is virtually unchanged compared to the previous quarter. Although the conditional inflation forecast is somewhat lower in the short term than in September, there is only little change in the medium term. The forecast is within the range of price stability over the entire forecast horizon (cf. chart). It puts average annual inflation at 0.2% for 2025, 0.3% for 2026 and 0.6% for 2027 (cf. table). The forecast is based on the assumption that the SNB policy rate is 0% over the entire forecast horizon.

Global economic growth was stronger than expected in the third quarter. Although US tariffs and trade policy uncertainty weighed on the global economy, economic development in many countries has thus far remained more resilient than had been assumed. Inflation remained elevated in the US, while in the euro area it was close to target.

In its baseline scenario, the SNB anticipates that growth in the global economy will be moderate over the coming quarters. Inflation in the US is likely to remain elevated for some time. In the euro area, on the other hand, inflation is expected to stay close to target.

Uncertainty has decreased somewhat compared to the last monetary policy assessment. That said, the baseline scenario for the global economy is still subject to significant risks. For example, US tariffs and trade policy uncertainty could yet weigh more heavily on global economic momentum than observed thus far. It is also possible that trade barriers may be raised again. At the same time, however, it cannot be ruled out that the global economy will continue to develop better than expected in the coming quarters.

Swiss GDP contracted in the third quarter. The decline was due in particular to the pharmaceuticals industry. Value added there had risen strongly in the first quarter because deliveries to the US had been brought forward in anticipation of possible tariffs. There was a countermovement in the second quarter, which continued in the third quarter. Value added rose slightly in the other manufacturing industries and in services. Owing to this subdued economic development overall, unemployment has risen further in recent months.

The economic outlook for Switzerland has improved slightly due to the lower US tariffs and somewhat better development globally. For 2025 as a whole, the SNB expects GDP growth of just under 1.5%. For 2026, it expects growth of around 1%. In this environment, unemployment is likely to continue to rise somewhat.

The main risk to the economic outlook for Switzerland is the development of the global economy.

Daily Pivots: (S1) 208.38; (P) 208.64; (R1) 209.04; More...

Intraday bias in GBP/JPY remains mildly on the upside for the moment. Current up trend should target 61.8% projection of 184.35 to 205.30 from 199.04 at 211.98. Outlook will stay bullish as long as 205.17 support holds, in case of retreat.

In the bigger picture, up trend from 123.94 (2020 low) is resuming. Next target is 61.8% projection of 148.93 to 208.09 from 184.35 at 220.90. On the downside, break of 199.04 support is needed to be the first sign of medium term topping. Otherwise, outlook will stay bullish even in case of deep pullback.

Daily Pivots: (S1) 182.11; (P) 182.36; (R1) 182.72; More...

Intraday bias in EUR/JPY remains on the upside for the moment. Current up trend should target 100% projection of 161.06 to 173.87 from 171.09 at 183.90. For now, outlook will remain bullish as long as 180.07 support holds, in case of retreat.

In the bigger picture, up trend from 114.42 (2020 low) is in progress and should target 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. However, considering bearish divergence condition in D MACD, upside should be capped by 186.31 on first attempt. Outlook will continue to stay bullish as long as 55 W EMA (now at 170.25) holds, even in case of deep pullback.

Daily Pivots: (S1) 0.8728; (P) 0.8740; (R1) 0.8751; More…

Intraday bias in EUR/GBP remains neutral and more consolidations could be seen. With 0.8800 resistance intact, further decline is expected. Fall from 0.8863 should at least be a correction to the up trend from 0.8221, with risk of bearish reversal. Below 0.8720 will target 0.8631 cluster (38.2% retracement of 0.8221 to 0.8663 at 0.8618).

In the bigger picture, rise from 0.8221 medium term bottom is still seen as a corrective move. Upside should be limited by 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Sustained trading below 55 W EMA (now at 0.8600) should confirm that this corrective bounce has completed. However, decisive break of 0.8867 will suggest that EUR/GBP is already reversing whole decline from 0.9267 (2022 high). That should pave the way back to 0.9267.

Daily Pivots: (S1) 1.7486; (P) 1.7525; (R1) 1.7557; More...

Intraday bias in EUR/AUD is turned neutral with current recovery, and some consolidations could be seen first. Outlook is unchanged that fall from 1.8160 is seen as the third leg of the pattern from 1.8554. Below 1.7477 will target 100% projection of 1.8160 to 1.7561 from 1.7976 at 1.7377. This will remain the favored case as long as 55 D EMA (now at 1.7731) holds.

In the bigger picture, as long as 55 W EMA (now at 1.7456) holds, price actions from 1.8554 could still be a correction to rise from 1.5963 only. However, sustained break of the EMA will argue that it's already correcting the whole up trend from 1.4281 (2022 low). In this case, deeper decline would be seen to 38.2% retracement of 1.4281 to 1.8554 at 1.6922.

Daily Pivots: (S1) 0.9339; (P) 0.9362; (R1) 0.9380; More....

Intraday bias in EUR/CHF remains neutral for the moment, and further rise is expected with 0.9325 support intact. On the upside, above 0.9394 will resume the rebound from 0.9178 to 0.9452 key structural resistance. Decisive break there will carry larger bullish implications. Nevertheless, firm break of 0.9325 will bring deeper fall to 55 D EMA (now at 0.9313) and below.

In the bigger picture, EUR/CHF has breached long term falling channel resistance as the rebound from 0.9278 extends. Considering bullish convergence condition in W MACD, sustained trading above 55 W EMA (now at 0.9372) will indicate medium term bottoming, and suggests that it's already in larger scale rebound. Further break of 0.9452 resistance will bring stronger medium term rally towards 0.9228 resistance next. Nevertheless, rejection by 55 W EMA will retain bearishness for another fall through 0.9278 at a later stage.

Markets

The Fed cut its policy rate for the third consecutive meeting by 25 bps yesterday to 3.5%-3.75%. The Fed still has to balance a weakening labour market against somewhat elevated inflation. There was again no consensus within the FOMC on how to address these opposing factors, as one member (Stephen Miran) voted for a 50 bps cut, but two others (Schmid and Goolsbee) wanted to keep the policy rate unchanged. The dots even showed a total of 6 out of 19 members in favour of the status quo. The median Federal Funds Rate projection for 2026 and 2027 remained unchanged at respectively 3.25%-3.5% and 3%-3.25%. Fed chair Powell indicated that the policy rate now is “within the range of plausible neutral estimates”, allowing the Fed to assess incoming data, with a January rate cut seen as rather unlikely. However, part of Powell’s analysis allowed the market to consider a less hawkish interpretation. PCE inflation forecasts for this (2.9% from 3%) and next (2.4% from 2.6%) faced downward revisions. Powell’s working hypothesis is still that most of the current elevated inflation was temporary due to higher goods prices driven by tariffs. Services inflation has been cooling. In addition, the Fed chair pointed at ongoing downside risks to the labour market, especially as current estimates on employment growth probably present an over-estimation. Markets responded to the “dovish” opening created by the labour market remarks. The US curve bull steepened, with yields declining between 7.7 bps (2-y) and -2.1 bps (30-y), assuming that the Fed focus remains slightly more tilted to maximum employment part of its dual mandate. An additional announcement to start buying T-bills (and other short-term Treasury securities) from next week on at a $40bn pace to maintain a situation of ample reserves added to the bull steepening move. By nearing neutral interest rate levels, the bar for additional rate cuts in early 2026 has been raised. Nevertheless, in case of weak (labour) market data next week and/or January, the debate on an additional precautionary rate cut might rapidly resurface. On other markets, equities rebounded yesterday with the Fed upwardly revising its growth forecasts, especially for next year (2.3% from 1.8% in September) and the Fed chair elaborating on ongoing high productivity gains supported. The combination of losing interest rate support and a risk rebound weighed on the dollar. DXY eased further from the 99.2 area early in the session to close at 98.79. EUR/USD closed just below the 1.17 big figure (1.1695).

Today’s eco calendar is thin, apart from weekly jobless claims. The Swiss national bank is expected to keep its policy rate unchanged at 0%. Even as Powell indicated that the Fed is now in a position to wait, we assume that both US yields and the dollar remain more sensitive to weaker than expected (labour market) data.

News & Views

The Bank of Canada as expected kept the policy rate unchanged at 2.5%. Economic growth at a 2.6% annualized clip in Q2 was surprisingly strong, it said, but that was the result of a steep drop in imports. The BoC anticipates a weak Q4 number with the import normalizing hanging in the balance with a grow in domestic demand. Growth is forecast to pick up in 2026, although uncertainty remains high. The labour market is a similar “on the one hand, but on the other” narrative. after solid employment gains over the last three months. Inflation, 2.2% in October, should remain close to the 2% target with the BoC willing to look through some choppiness in the coming months. Underlying gauges hover around 2.5%. The central bank concludes that “the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment.” Canadian swap yields fell up to 5 bps at the front. USD/CAD ended lower below 1.38 but that was mainly a US dollar move.

Brazil’s central bank left the policy rate at 15% and kept their view of an economy cooling while inflation, though still above the 3% target, is improving. They lowered CPI forecasts to hit 3.2% in 2027Q2 (from 3.3%), which is their relevant policy horizon for now. Risks remain symmetrical. The 15% level is considered “appropriate” to bring inflation to target, considered a slight dovish change compared to November’s “will be enough”. The Brazilian real’s strengthening over much of 2025 probably helps explain the downwardly adjusted CPI forecasts. But its recent weakening to a two month low of USD/BRL 5.47 warrants ongoing caution, meaning the 15% level may be the reference for the time being..

Daily Pivots: (S1) 1.3761; (P) 1.3816; (R1) 1.3849; More...

Intraday bias in USD/CAD is back on the downside with breach of 1.3798 temporary low. Sustained break of 61.8% retracement of 1.3538 to 1.4139 at 1.3768 will extend the fall from 1.4391 towards 1.3538 low. On the upside, above 1.3870 minor resistance will turn intraday bias neutral again first.

In the bigger picture, current development suggests that price actions from 1.4791 is developing into a deeper, larger scale correction. In the less bearish case, it's just correcting the rise from 1.2005 (2021 low). But even so, break of 1.3538 will pave the way to 61.8% projection of 1.4791 to 1.3538 from 1.4139 at 1.3365. This will remain the favored case as long as 1.4139 resistance holds, in case of rebound.

Daily Pivots: (S1) 0.6641; (P) 0.6664; (R1) 0.0.6698; More...

Intraday bias in AUD/USD is turned neutral with current retreat, and some consolidations would be seen. On the upside, above 0.6685 temporary top will target a retest of 0.6706 high. Decisive there will confirm up trend resumption, and target 61.8% projection of 0.5913 to 0.6706 from 0.6420 at 0.6910. However, break of 55 D EMA (now at 0.6544) will extend the corrective pattern from 0.6706 with another falling leg.

In the bigger picture, the break of multi-year falling trend line resistance suggests that rise from 0.5913 is possibly reversing whole down trend from 08006 (2021 high). Decisive break of 38.2% retracement of 0.8006 to 0.5913 at 0.6713 will solidify this case, and bring further rally to 61.8% retracement at 0.7206. On the downside, however, firm break of 0.6420 support will suggest rejection by 0.6713 and retain medium term bearishness.