MNI STATE OF PLAY: SNB To Up Outlook, Sees Franc Highly Valued

The Swiss National Bank could adjust growth and inflation forecasts higher after its monetary policy meeting on Thursday, but President Thomas Jordan is likely to stress the temporary nature of any improvement in prices and note that the franc remains highly valued

Jordan may also express concern over rising Covid-19 infection rates and the slow rollout of vaccination programmes at home and in Europe, taking the sheen off Switzerland's relatively strong Q4 2020 performance and signs activity may have rallied further in Q1 2021.

With inflation, currently forecast at zero, unlikely to trouble the upper reaches of the SNB's price stability target of 0-2% before falling back later in the year, the central bank is likely to leave its policy rate unchanged at -0.75%.

THIRD COVID WAVE

Jordan may also emphasise the threat from new Covid-19 variants. The government last week extended lockdown measures in place since December until at least Apr. 14, warning of a third wave of infections.

The franc has depreciated by over 1.5% against the euro since December, when the SNB repeated that it was willing to buy foreign currencies "more strongly" to contain the exchange rate.