Deutsche Bank Trade of the Week: Sell EUR/CHF

Target 1.04, entry 1.0912, stop 1.12
We like entering EUR/CHF shorts as a medium-term trade, based on our
expectation for the SNB to withdraw from the market by Q1 of next year. The
improving economic backdrop may no longer justify the growing costs to the
banking sector from balance sheet expansion. And the cost of withdrawal
should be limited: light positioning in the currency market means the franc
would appreciate if the SNB withdrew, but not on the scale of January 2015.
Cantonal payments in January 2016 still make it unpalatable for the SNB to
suffer losses from a falling EUR/CHF for now, but it will be much easier to
withdraw thereafter.

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