"The risk of less favorable global economic developments has decreased somewhat compared to the last quarter. Nevertheless, structural problems in Europe persist, which could cause new tensions on the markets."
-Thomas Jordan, the Swiss National Bank President
A bunch of economic reports was released on Tuesday, showing unemployment rate was unchanged in September, consumer prices fell on a yearly basis, while retail sales exceeded forecasts. As it was widely expected, the State Secretariat for Economic Affairs said the number of unemployed people stayed at 3.2% last month, from the same figure a month earlier. Meanwhile, annual growth in retail sector accelerated to 2.4% in August, up from 0.6% in July, outpacing analysts' projections of a 1.5% gain. Core retail sales advanced 2.3%, following a 0.5% increase in July.
The previous two reports came either in line with forecasts, or even above them, however, the most important indicator still lags to grow. The closely-watched consumer prices fell slightly on an annual basis, suggesting the SNB's cap on the Franc is still vital to avoid deflationary pressures. Prices dipped 0.1% on the year, after staying flat in August. On a monthly basis, however, CPI ticked up 0.3%, supporting the case SNB's measures are working and spreading through the economy. Despite SNB's pledge to defend the cap for as long as it is needed, some analysts warned that amid recent string of upbeat data, and signs of economic amelioration in the global economy, the cap may become increasingly unnecessary as domestic currency could start to lose ground versus the single currency.
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