While inflation in the EU slowed in April, in Switzerland it held steady at 0.80%, above its long-term average of 0.50%. Meanwhile, the CHF has softened against EUR and USD, which should boost exporters’ results going forward. Growth should excel, and boost the Swiss Market Index, which has languished in negative numbers since the beginning of the year (-4.61%). Unlike EUR/CHF sideways trading below 1.20, USD/CHF’s steep rise above the psychological barrier of 1.00 continues, heading to 1.0045 in the short-term.
In real terms, Swiss inflation remained lower, due to a deceleration in clothing, hotels and restaurants and recreation. With an April take-off in manufacturing (manufacturing PMI: 63.6, prior: 60.30) and a continued decline in unemployment, estimated at 2.70%, the Swiss economy remains on track for a strong step up in 2018, with GDP growth expected above 2% for Q1, boosted by strong export numbers since February.
By Vincent Mivelaz
