As of 18 April, total sight deposits at the Swiss National Bank (SNB) are reported at CHF 448.3 billion, compared to CHF 446.9 billion previously. This slight change indicates stable conditions in Swiss sight deposits over the past week.
Domestic sight deposits have increased to CHF 439.7 billion from CHF 438.4 billion in the preceding period. The euro-Swiss franc exchange rate remains steady, managing to avoid testing the previous year’s lows near 0.9200.
Liquidity Levels and Sight Deposits
Put simply, what the initial data tells us is that liquidity levels held at the Swiss National Bank have been marginally tweaked, though not in any way suggesting a shift in monetary policy stance. Sight deposits—those immediately available for withdrawal—tick slightly higher, particularly among domestic holders, moving up by CHF 1.3 billion. The move is minimal but points to a slight build-up of liquidity by Swiss banks, possibly reflecting reduced demand for liquidity elsewhere or a shift in reserve management strategy.
Meanwhile, the EUR/CHF exchange rate not only avoided retesting the 2023 trough at 0.9200 but also maintained a narrow trading range. That has underlined a calm in the pair, particularly in the face of broader tensions affecting certain G10 currencies. Instead of widening, the spread has remained more or less flat across the week, a sign that traders are neither positioning aggressively nor pricing in heightened volatility in the near term.
From our perspective, this stability—both in reserves and FX rate—suggests that Swiss authorities are not feeling pressure to intervene or adjust the monetary levers in any urgent fashion. However, that doesn’t mean passivity is called for. Quite the contrary: steadiness in such indicators provides room to position for the next move, not merely react to it.
FX Derivatives Strategy
When deposits at the central bank hold steady or drift gradually, and FX rates avoid extremes, volatility strategies—particularly in FX derivatives—tend to suffer from a lack of clear catalysts. We don’t see this as a time for short-dated gamma. Instead, we have started positioning with more focus on curve steepening and mild directional risk along the middle of the forward curve.
Jordan’s team has not signalled anything about shifting policy motivations—whether explicitly through speeches or implicitly via operations. The numbers will do the talking if anything is to change. This means watching three-week trends in reserve data and ECB differentials more closely than ever, as yield spreads with Germany—and to a lesser degree France—offer clearer signs of stress or calm.
In our book, we’ve reduced short-vol positioning for now, and continue to ask whether current pricing in six-month EUR/CHF options properly reflects the longer-term leanings of the SNB. There are ways to find value in low-premium trades with convex payoffs should current calm give way unexpectedly.
The SNB’s role, after all, tends not to fit the patterns of larger central banks; this makes market forecasting harder, but also offers opportunity for those willing to spend time reading secondary indicators. For now, we see no strong reason to doubt the current holding pattern, though we’re watching curve shape and vol smile shifts for any hints of repositioning under the surface.
