POV: SNB TO REMAIN A STEP BEHIND THE ECB........>

SNB: POV: SNB TO REMAIN A STEP BEHIND THE ECB

-Economists and analysts unanimously see no change in policy from the Swiss

National Bank at their Thursday meeting, with Thomas Jordan and his board

remaining in wait-and-see mode as the ECB eye potential rate hikes mid-2019. SNB

policy is likely to remain in lockstep with the ECB as EUR/CHF trades stubbornly

below the previous CHF cap of 1.20. This curtails the room with which the SNB

can tighten policy without over-strengthening the currency.

-Hawkish risk: Any indication that the SNB board are confident the Eurozone

economy is healing and markets can tolerate tighter policy will be read as a

hawkish signal. This is increasingly unlikely, however, with EZ inflation

expectations at multi-year lows.

-Dovish risk: The SNB could signal time lag between ECB and SNB policy should

widen beyond the current 2/3 month expectation to cement domestic inflation

expectations and pressure the CHF closer 1.20. Jordan's post-rate decision press

conference and economic projections could be the communication channel of choice

for such a move.