On all metrics that we consider the NOK is more defensive than the CHF. However, the market has been buying the CHF in a frenzy of defensive activity whilst ignoring the NOK. We believe this is a mispricing.
In particular, those fleeing from the EUR and the fear of any possible systemic problems would be ill advised to rush into the CHF. It does not offer safety from a break up scenario or any systemic problems owing to its giant sized banking sector. In this scenario the NOK would be less exposed than the CHF. Those who rushed into the CHF should for all intents have a high exposure to the NOK as well.
The reason we are not specifically suggesting a pure switch from CHF into NOK is because we expect both CHF and NOK to appreciate against the EUR in the current environment. There is more value in buying all the beautiful against the ugly.
In a risk off situation there is no better currency than the NOK.
HSBC Global Research