IMPLICIT TIES TO ECB KEEP SNB POLICY UNDER......>

SNB: IMPLICIT TIES TO ECB KEEP SNB POLICY UNDER PRESSURE

-The ECB's decision to bump forward guidance further into the long grass will be

putting the SNB under pressure to do the same this week, but Thursday may be too

soon for considerable changes. As a result, expectations are for the bank to

keep policy unchanged, re-asserting that the bank are vigilant and will act

against disorderly markets if required. How the statement addresses the recent

uptick in the CHF will be of more importance.

-Dovish risk: The SNB could tweak language to recognise the uptick in currency

volatility. The bank could do this by strengthening their judgement on the FX

market as "fragile" to "volatile" or "disorderly". This may signal a lower bar

for currency intervention, working against the CHF.

-Hawkish risk: An upbeat SNB on the prospects of Eurozone growth would be a

hawkish surprise after their March meeting saw economic conditions as "weaker

than generally anticipated". This may take the form of higher 2019 underlying

inflation expectations (headline inflation forecasts may also tick higher on

energy prices).