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TestThe German ZEW survey is due on Tuesday 16th January and is so far the most awaited news of the first two days of this week’s trading. There is a lot of optimism in play as recent stats also show
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Swiss ZEW Sentiment Results Fail To Stir The CHF
By Isaac Ndegwa
The Swiss ZEW – CS indicator has yet again experienced a decline. The trusted economic sentiment indicator for the Switzerland economy dopped 8.7 points to give a -2.8 points final reading. The 17th August result is a close reflection of the downward trend that was also witnessed in the June results. On the brighter side, the experts who took part in the survey stil suggest that there is an upward trend in the current Switzerland economic situation. The expert’s sentiment indicator shows a rise of 11.3 points compared to the last recorded figure of 0.0 points. That generally shows that the economy is looking upbeat.
A negative result was last experienced in February 2016 as the majority (68.6%) of the experts expected the economic development to stay flat over the next 6 months. What makes up a negative indicator? The experts are usually categorized into two; with some having a negative bias to the economic development while some have a positive bias. In that view, since the indicator showing the experts vouching for a positive development reads at 14.3 percent and that indicating the experts expecting negative development reads 17.1 percent, its overall result is negative.
High inflation rates exist even though the earlier figures have been revised lower
In a broader perspective, the existing high inflation expectations have now been revised downwards according to the current survey. That is evident from the negative result (also a declining result) since the difference between those who expect a rise in inflation rates and the lower inflation rates camp gives a reading of 25.6 points. Switzerland is making good strides towards an optimum inflation rate that can make the economy thrive with its current rates of economic investment, employment and industrial activity.
If the inflation trends continue as they are, Switzerland is likely to post higher inflation rates in August and September. The current inflation rates have marked an increase if compared to the previous months. Currently, the Switzerland inflation is at negative 0.2 percent if compared to the previous month’s YoY inflation rate. The overal inflation rate in the Eurozone is similar (a 26.6 points decrease) while that of the USA economy slightly decreased by 7.4 points.
The Swiss Franc has not budged a bit since the ZEW survey release notes
Significant divergence existed between the Swiss outlook and the wider Eurozone outlooks this month, with the euro indicators strengthening while those of the Swiss index plummeted. Both Swiss and European indicators however show shifts in sentiment at the moment, minimizing the risk of surprises in the next few months. The EURCHF however did not show much reaction as the price did not stir even slightly once the results were released. The EURCHF has remained trading within a 30 pip range, reading 1.0853 against a daily high of 1.0863. The same trend is seen against other major rivals as the CHF trades at 0.9631 versus the greenback and 104.68.
A negative result was last experienced in February 2016 as the majority (68.6%) of the experts expected the economic development to stay flat over the next 6 months. What makes up a negative indicator? The experts are usually categorized into two; with some having a negative bias to the economic development while some have a positive bias. In that view, since the indicator showing the experts vouching for a positive development reads at 14.3 percent and that indicating the experts expecting negative development reads 17.1 percent, its overall result is negative. High inflation rates exist even though the earlier figures have been revised lower
In a broader perspective, the existing high inflation expectations have now been revised downwards according to the current survey. That is evident from the negative result (also a declining result) since the difference between those who expect a rise in inflation rates and the lower inflation rates camp gives a reading of 25.6 points. Switzerland is making good strides towards an optimum inflation rate that can make the economy thrive with its current rates of economic investment, employment and industrial activity.
If the inflation trends continue as they are, Switzerland is likely to post higher inflation rates in August and September. The current inflation rates have marked an increase if compared to the previous months. Currently, the Switzerland inflation is at negative 0.2 percent if compared to the previous month’s YoY inflation rate. The overal inflation rate in the Eurozone is similar (a 26.6 points decrease) while that of the USA economy slightly decreased by 7.4 points.
The Swiss Franc has not budged a bit since the ZEW survey release notes
Significant divergence existed between the Swiss outlook and the wider Eurozone outlooks this month, with the euro indicators strengthening while those of the Swiss index plummeted. Both Swiss and European indicators however show shifts in sentiment at the moment, minimizing the risk of surprises in the next few months. The EURCHF however did not show much reaction as the price did not stir even slightly once the results were released. The EURCHF has remained trading within a 30 pip range, reading 1.0853 against a daily high of 1.0863. The same trend is seen against other major rivals as the CHF trades at 0.9631 versus the greenback and 104.68.
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By Isaac Ndegwa
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