SNB likely on hold in its 19 March meeting

The Swiss National Bank will be setting policy for the first time following its unexpected decision to abandon the EURCHF floor on 15 January 2015. 

SNB is likely to keep its policy rate unchanged at -0.75% and preserve the target range for three-month Libor at -1.25/-0.25%, in its 19 March meeting. 

Barclays Capital notes ....

• We expect SNB to keep policy unchanged at -0.75% but revise its inflation and growth forecasts lower, accounting for the exchange rate pass-through and a further drop in energy prices. 
  
  
• On the currency front, we expect the SNB to re-iterate that the CHF remains overvalued, with the Bank standing ready to take further measures if appreciation pressure resumes.
  
  
• Due to the ECB's recent expansion of its asset purchase programme, however, we do not believe that the SNB remains solely focused on the EURCHF exchange rate despite the fact that the euro area is still by far the largest trading partner. If the euro weakens further on the back of the ECB's QE (also against USD), we would expect the SNB to accommodate some further appreciation against the euro before again stepping up interventions in FX markets