(29JANUARY 2019)DAILY MARKET BRIEF 1:Switzerland’s record exports

Despite a 2018 that included trade sanction escalations, a sharp drop in emerging currencies, fears of a global economic slowdown and a hawkish Fed, Swiss exports reached CHF 233.1 billion (+5.70%), a new record and the highest percentage gain since 2010. Switzerland not only maintained exports thanks to machines, electronic and watch products, it also imported more, reaching CHF 200 billion for the first time, coming to a trade surplus of CHF 31.3 billion. Swiss exports boomed in North America (+11.60%), Europe (+4.20%) and Asia (+4.40%). However, there was a sharp drop in UK demand of 23% to its lowest in 30 years, amid continued Brexit uncertainties. The Swiss watch industry appears in shape, with only two monthly drops in 2018 and yearly exports of CHF 21.2 billion, 6.30% higher than last year, although CHF 1.1 billion less than 2014’s record high. 

Still, the State Secretariat for Economic Affairs (SECO) recently revised its Swiss GDP growth forecast in 2019 from 2% to 1.50%. We expect Switzerland to maintain solid export numbers despite economic conditions.