"1.20 is still necessary because we can't be sure what will happen in the Eurozone"
- SNB governing board member Fritz Zurbruegg
Swiss KOF leading economic indicator improved for a third straight month in June, rising hopes the economy will continue gaining momentum even despite deepening Eurozone recession and a weak performance of the global economy. The index, compound by the KOF Economic Research Agency, rose 0.07 points to 1.16 this month, up from 1.09 in the preceding month, however, below analysts' expectations of a 1.19 reading. As the economy is expected to improve further at least during the next six months, the institute noted that the prospects for Swiss industry and construction are now much brighter and the situation in banking is stable.
Another bright sport was shown earlier this month, as an index of consumption amid Swiss residents inched slightly higher last month, boosted mostly by a notable improvement in sentiment in retail sector. The UBS consumption indicator increased to 1.46 from the previous month, when it reached 1.43. Recent data suggests the economy is on the right track, benefiting from a Franc cap, implemented by the SNB to prevent deflation and avoid a recession, as well as raising hopes that retail sales will stabilize and the pressure on margins will wane soon. The SNB now expects the GDP growth of 1.0-1.5% for 2013.
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