Sight deposits at the Swiss National Bank for the week ending 12 September stood at CHF 468.5 billion, down from CHF 471.9 billion the previous week.
Domestic sight deposits recorded a minor decrease, reaching CHF 441.7 billion compared to CHF 442.0 billion prior.
Recent Patterns in Sight Deposits
This reduction in sight deposits aligns with the pattern observed in recent weeks.
The latest data on Swiss sight deposits shows a minor decrease, which we see as the Swiss National Bank continuing its hands-off approach in the currency markets. This lack of intervention tells us the SNB is not actively fighting the franc’s current strength. This reinforces the idea that policy remains on a steady, predictable path for now.
We are looking ahead to the SNB’s monetary policy decision next week, which makes this data particularly relevant. This slight reduction in liquidity supports our view that a surprise interest rate cut is highly unlikely. Traders should be positioned for the SNB to either hold rates or reiterate a hawkish stance.
This stance is further justified when we look at recent inflation figures. The August 2025 Swiss CPI data showed inflation holding at 2.1%, which is still above the central bank’s 2% target. Given this persistence, the SNB has little reason to signal any loosening of policy in the near future.
Market Implications for Franc Volatility
For derivatives, this means implied volatility on Swiss Franc options will likely remain firm heading into the SNB’s meeting. The market is not pricing in a major change, but the risk of a hawkish surprise keeps a floor under volatility. We think selling short-dated franc volatility is a risky strategy right now.
Looking back, we see this as part of the long normalization process that began after the large balance sheet expansions of the early 2020s. The consistent, slow decline in sight deposits since 2024 shows a commitment to reducing liquidity over time. This makes the risk of a sudden, large-scale intervention to weaken the franc feel much lower than in past years.
Therefore, strategies involving the EUR/CHF pair should focus more on relative policy between the SNB and the ECB. With the European Central Bank also on hold but facing its own economic challenges, the cross-rate may see limited movement until one of the banks clearly signals a different path. This suggests range-trading strategies using options could be effective in the coming weeks.
