Morgan Stanley remain bullish on CHF over coming weeks

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• Morgan Stanley Research discusses CHF outlook and maintains a tactical bullish bias over the coming weeks.
• “We remain bullish on CHF and long CHF/NOK. We think fundamental factors continue to point to further CHF strength as long as the SNB persists with its preference for a stronger currency to curb imported inflation. Euro area growth expectations – a key driver of EUR/CHF – continue to deteriorate as Russian gas flows are getting further reduced, and recessionary concerns are rising, pointing to inflows for safe-haven currencies like CHF,” MS notes.
• “Short positioning in EUR/CHF is again at stretched levels, which may again warrant some near-term consolidation. Over time though, we continue to see the cross moving lower to 0.95. USD/CHF should remain driven by the broader USD trend,” MS adds.