Wil the FOMC meeting on Wednesday be the catalyst to break USDCHF out of its range? The risks are tilted to the hawkish side leading into the meeting. What are some of these hawkish risks? 1) Dot plot - 7 hikes for 2022 and 2024 median dot above neutral rate of 2.5% 2) Balance sheet reduction 3) Inflation forecast for 2024 4) Press conference, flexibility with regards to the size of future hikes. We also saw SNB sight deposit data out today, which showed a very minor increase. An uptick in sight deposits indicates FX intervention by the SNB. Given EURCHF broke parity, some may have been expecting a more interventionist stance from the SNB.
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