What to Look For If The Market Wants To Challenge The SNB

Since Sept 6, when the SNB surprised the world by putting a floor under the euro at CHF1.20, the market has not deigned to challenge it, despite the continuing pressure in the euro zone debt markets, where spreads continue to widen and CDS prices continue to rise. This is true for banks, many corporates, and sovereigns. So while the conditions that led to the Swiss franc's overshoot remain in place, euro-Swiss has been in narrow ranges above the CHF1.20 floor.