Morgan Stanley (MS) reiterates its bearish bias for the Swiss Franc (CHF) in its latest research report, published early Thursday in Europe.

The report initially said, “We maintain our bearish bias on CHF.”

While giving reasons, the note cited expectations for four Fed rate hikes in 2022 to see the US 10-yr yields at 2.20% by 2Q22. 

MS also stated, “The SNB remains one of the most dovish central banks in the G10,” which in turn helped them say that the widening yield differentials should keep putting downward pressure on CHF.

Additional quotes

We expect the further upside momentum in German Bunds yields should also weigh on CHF.

Positioning in EUR/CHF has normalized somewhat compared to the beginning of the year but remains net short.

That said, USD/CHF prices bounce from intraday low to 0.9153 but stay negative for the second consecutive day amid mixed concerns.