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What is up, forex buddies? You know, after yesterday’s write-up on the latest monetary policy statement from the Swiss National Bank (SNB), I just realized that it’s been a while since I last made an economic round-up for Switzerland.

And with good reason too since some reports are only available in Deutsch (German) or Français (French).

But don’t worry because I, Forex Gump, will always have your back (that’s what forex friends are for, after all). So, without further ado, let’s bite down on the latest data from the land of Swiss army knives, chocolates, and cuckoo clocks.


After contracting by 0.2% back in Q1 2015, the Swiss economy managed to erase its earlier loss with a 0.2% expansion for Q2 2015. By doing so, the Swiss economy was (just barely) able to avoid a technical recession.

Forex: Swiss GDP q/q

In terms of expenditure, the main contributors to keeping the Swiss economy supported were household spending (+0.3% current, +0.2% previous), government spending (+0.2% current, +0.3% previous), and the positive trade balance on goods due to imports (-11.3% current, +2.7% previous) falling faster than exports (-6.3% current, -4.5% previous).

Surprisingly enough, the main drag was the negative trade balance on services due to imports (+3.0% current, +0.6% previous) greatly overtaking exports (+0.9% current, -1.4% previous).

Year on year, the Swiss economy only grew by around 1.2% for Q2 2015 (+1.2% previous), but an increase is always a good thing. And besides, the Swiss economy has been growing on an annualized basis for 22 consecutive months now, and that’s a great thing.
Forex: Swiss GDP y/y


The jobless rate for August ticked higher to 3.2% from the previous 3.1% due to an influx of new job seekers.

Regionalen Arbeitsvermittlungszentren (Regional Work Centers or RAV) reported that there 192,669 job seekers for the month of August, which is 1,730 more than the previous month.

And the Swiss economy wasn’t apparently able to absorb some of them because the number of unemployed people who enrolled with the RAV increased by 3,229, bringing the total number of unemployed persons to 136,983.

Forex: Swiss Jobless Rate

Consumer Spending & Sentiment

As I mentioned earlier, consumer or household spending has been a major factor in keeping the Swiss economy afloat.

But what about the more recent data? Well, it doesn’t look too good since consumer confidence in July plummeted to -19 (-6 previous).

Forex: Swiss Consumer Confidence

Looking at the components of the report, consumer expectations with regard to future economic development sank like a rock to -25 (-8 previous) and it also looks like the Swiss are growing more pessimistic with regard to their current financial situation (-12 current, -4 previous).

But it seems like they’re still not afraid to spend on major purchases, such as cars or homes if they really have to (+6 current, +15 previous).

The poor consumer sentiment was reflected on the retail sales data for July since the seasonally-adjusted reading slumped by 0.6% month-on-month after increasing by 1.4% previously, which is definitely a bad start for Q3 GDP.

Apparently, the main drag was lower demand for non-food items, excluding fuel, since the retail sales value decreased by 0.9% on a monthly basis.

Forex: Swiss Retail Sales m/m

On a slightly more upbeat note, the year-on-year reading shows that retail sales are still in the red, but it’s steadily clawing its way back up after dropping hardback in May of this year.
Forex: Swiss Retail Sales y/y

Business Sentiment

The ordinary Swiss consumer may not be all that happy, but business is good in Switzerland since the KOF Swiss Economic Institute’s economic barometer or Konjunkturbarometer ticked slightly higher to 100.7 in August from 100.4 previously.

Forex: Swiss KOF Indicator

The overall optimism is due to positive tendencies in the banking and manufacturing sectors, although the construction sector seems to be holding some negative sentiment.

Oh, to the newbie forex traders out there, the KOF economic barometer is a leading indicator for the Swiss economy comprised of 217 indicator variables.

It is meant to forecast the development of the Swiss business cycle. It also practically acts as a gauge for business confidence since it mostly incorporates indicators from the business sector.

Moving on, Credit Suisse’s manufacturing PMI corroborates the KOF economic barometer since it shows that the Swiss manufacturing sector expanded in August (52.2 current, 48.7 previous).

Forex: Swiss Manufacturing PMI

And things would probably get better for businesses since the ZEW economic sentiment indicator posted a 3.8 points increase, propelling September’s reading to 9.7 points, which is the highest reading since March 2014.

Forex: Swiss ZEW Indicator


Switzerland is still suffering from abysmally poor inflation levels. And while the month-on-month reading for August seems slightly upbeat (-0.2% current, -0.6% previous), the yearly reading actually shows that the intensifying deflationary trend is back (-1.4% current, -1.35 previous).

Forex: Swiss CPI m/m

Forex: Swiss CPI y/y

The main drags to the dismal annualized reading were declining prices for food (-1.1% current, -1.5% previous), energy (-1.1 % current, -0.5% previous), health services (-0.3% current, -0.5% previous), and transportation (-4.6% current, -4.8% previous).

Summary & Potential Effects on the Forex Market

Overall, the Swiss economy isn’t really doing that well. But then again, the main driver for the Swissy’s forex price action is usually risk sentiment – forex traders flee to the Swissy during times of uncertainty and dump it when risk appetite is high.

Still, forex traders did buy up the Swissy across the board as a likely response to the SNB’s optimistic statement that it “expects economic activity to pick up gradually in the second half of the year,” so perhaps some longer-term forex traders are looking at the fundamentals?

In any case, it seems like the demand for the safe-haven Swissy may be picking up again, at least in the near term, since risk aversion seems to be making a comeback after the U.S. Fed’s recent decision. Whether risk aversion is here to stay, is still an open question, though.