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Swiss Inflation Stable, Industry PMI In Decline

By Swissquote LtdMarket OverviewJul 04, 2019 12:40
Swiss Inflation Stable, Industry PMI In Decline
By Swissquote Ltd   |  Jul 04, 2019 12:40
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Despite the punitive decision taken by the EU not to grant equivalence of Swiss stock market, countermeasures undertaken by Swiss authorities to safeguard Swiss equities have paid off. Since the change of regime, trading on Swiss stocks has gone smoothly, with both SMI and SPI indices gaining 1.60%, in line with European peers. CPI remained stable in June while the drop in industry PMI to 47.7 in June, its lowest range since October 2012, is becoming more of an issue.

Swiss inflation came in line with expectations at 0.60% as consumer prices underlying components have been evolving in opposing directions. The EU harmonised and core gauges came both at 0.70%, suggesting a slight acceleration and close to Swiss National Bank inflation June forecast of 0.60% for 2019. The situation on the front of the Swiss industry is yet more worrying, as the industry PMI points for the third consecutive time in contraction territory while production declines for the fourth time in a row at 48.2. Similar trends are shown by Raiffeisen’s SME PMI which fell to 52 (prior: 54.2) due to lower production, an increase in inventory and a drop in backlogs (from 56.8 to 50.7), its sharpest drop since March 2018, the inception date of the sentiment indicator.

EUR/CHF is maintained within the 1.11 range, bouncing back from 1.10795 (24/06/2019 low) and expected to trade sideways along 1.11300. June publication of the SNB's foreign exchange reserves on Friday could signal an intervention in the foreign exchange market if significant changes occur.

Disclaimer: While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein. This document does not constitute a recommendation o sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investment.

Although every investment involves some degree of risk, the risk of loss trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make informed decisions prior to investing. The material presented here in not to be construed as trading advice or strategy. Swissquote Bank makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change. Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments."

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Swiss Inflation Stable, Industry PMI In Decline

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Swiss Inflation Stable, Industry PMI In Decline

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