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"Switzerland is in a good situation, there's solid domestic demand supported by the labour market"
- Alessandro Bee from Sarasin
Swiss economic indicator, which was designed to predict the direction of the economy over the following 6 months, improved slightly in April, recovering after five months of declines, suggesting the economic momentum may pick up. According to the KOF Swiss Economic Institute, its economic indicator rose to 1.02 from a revised 1.00 in March, beating analysts' expectations of a 0.98 reading. Swiss economy is expected to grow 1.5% this year, even as the Franc remains highly valued and a further appreciation would have severe consequences for the economy. Earlier this month, the SNB pledged to defend its 1.20 per euro cap.
"Switzerland is in a good situation, there's solid domestic demand supported by the labour market. But from a cyclical view, Switzerland could have a hard time over the next couple of quarters as it lacks the export demand from Europe," said Alessandro Bee from Sarasin.
"We see that the Swiss industry component is still falling which is not a big surprise when you see Euro Zone purchasing managers data are still pretty weak," Maxime Botteron, Credit Suisse.