SNB

•  2009 SWISS GROWTH IN ALL LIKELIHOOD NEGATIVE
• SWISS INFLATION FALLING FASTER THAN EXPECTED
• SWISS THIRD-QUARTER GDP GROWTH PROBABLY NOT NEGATIVE
• SWISS ECONOMY WILL LIKELY CONTRACT IN 4TH QUARTER
• NO REAL TIGHTENING OF CREDIT SEEN IN SWITZERLAND
• DEGREE OF ECONOMIC UNCERTAINTY REMAINS VERY HIGH
• SNB WILL USE ALL MEANS AT ITS DISPOSAL FOR ECONOMY

The SNB has just cut interest rates by a full 100BPS down to 1.00%. This brought the USDCHF and EURCHF to session highs and pushed the USDCHF through the 1.2145 resistance level which the pair tested several times overnight.  In fact, the USDCHF is at a high since mid-August 2007.

The Swiss National Bank, ECB and BOE all announced increases in the US liquidity auctions. 

• ASSUMES WEAKER GROWTH THIS YEAR
• THEY REMAIN VIGILANT
• INFLATION TO DROP LESS
• CRISIS COULD CAUSE MORE SLOWDOWN THAN EXPECTED
• PROSPECT OF SLOWING INFLATION ALLOWS UNCHANGED RATES
• ECONOMIC SLOWDOWN MODERATING INFLATION
• CURRENT INFLATION NO MORE THAN TRANSITORY
• FORECAST INVOLVES CONSIDERABLE UNCERTAINTIES
• INFLATION FORECAST AT 1.3% IN 2010
• INFLATION OVERSHOOT DUE TO OIL, ECONOMIC ACTIVITY
• ECONOMY HAS REMAINED RELATIVELY ROBUST
• INFLATION ABOVE 2% UNTIL 2Q 2009
• SWISS ECONOMY IN LINE WITH ITS EXPECTATIONS
• SITUATION ON FIN MKT MATTER FOR CONCERN
• INFLATION SLIGHTLY MORE PERSISTENT
• OIL REMAINS HIGH
• U.S. SLOWDOWN SPREADING TO EUROPE

Says the level of the Swiss Franc is not effecting exports.  Little reaction to the headline.  The USDCHF is trading at 103.18.

Highlights from Swiss National Bank's Governing Board Member Thomas Jordan from the Zugar Chamber of Commerce:

• Interest Rates are currently appropriate
• Economy is robust but risks do remain
• GDP growth seen 1.5%-2% for 2008
• More transparency from banks to improve money markets will take time

• Central Banks in Less Comfortable Situation
• SNB WILL MONITOR BANKS MORE CLOSELY IN FUTURE
• BANKS' RISK MEASUREMENTS NOT GOOD ENOUGH
• CONFIDENCE BASED ON ROBUST GLOBAL ECONOMY
• CONFIDENCE BASED ON CENTRAL BANK COOPERATION
• CONFIDENT THAT PROBLEMS WILL BE OVERCOME
• INFLATION PRESSURE INCREASED IN RECENT MONTHS
• SWITZERLAND FACES DIFFICULT TIM
  

Inflation forecast to 2.0 % from 1.7% for 2008.  2009 to 1.4% from 1.5% previously

Growth estimated to be 1.5 to 2.00 versus previous 2.00% estimate.

No urgency to react on rates.  Awaiting more data.