"The indicator adds to the evidence that the outlook for the Swiss economy is improving, and most institutes--including ourselves--forecast an acceleration of economic growth next year"
- Credit Suisse
Swiss stocks turned green for a fourth day in a row on Tuesday, extending their highest level since May, while the Swiss Franc is moving further away from the 1.20 cap. Another welcoming sign for Swiss policymakers came out with a release of trade balance for September posted by the Federal Statistical Office. The report showed shipments from the Alpine country soared due to one extra business day and on the back of stronger demand, especially from the Eurozone and United States for Swiss pharmaceuticals, machinery and plastics. Swiss trade surplus stood at 2.49 billion francs last month, up from a revised 1.86 billion a month earlier, outpacing analysts' predictions for a 2.01 billion surplus. Exports total 16.9 billion over the corresponding period, up 5.3% on year in real terms, or 2.2% in nominal terms. Imports however stood at 14.4 billion, 0.9% lower in real terms and down 2.6% in nominal terms. Meanwhile, one of the key export products, watches, were highly popular overseas last month, as watch exports propelled 8.5% on the year.
EUR/CHF currency pair is currently trading around 1.235, more than 350 pips higher than the cap imposed by the SNB to prevent deflation and economic slowdown. As long as Swiss Franc is losing ground versus its major peers, Swiss manufacturers and exporters will continue benefitting, providing additional boost for the economy.
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