Daily Economic Commentary: Switzerland

[PipDiddy]

The Swiss franc traded in an almost perfect “U” pattern against the safe haven U.S. dollar yesterday. USD/CHF started the day at .9326, fell as low as .9276, and then recovered all of its losses to close the day barely changed at .9314.

The UBS Consumption Indicator was published yesterday. It showed that the indicator recovered slightly from its weak showing in August. It came in with a reading of 1.07, up from 1.02. According to the data, retail sales and overnight stays in hotel drove the rise and new car registrations slumped. Overall, the UBS Consumption Indicator suggests that consumer spending in the current year will make a major contribution to economic growth.

No major data scheduled for release today, but I think we’ll still see a lot of volatility from the Swissy. There is a lot of tier 1 and 2 data set to come out from the euro zone that could indirectly affect the Swissy’s price action.

[PipDiddy]

Halloween may be over, but that didn't stop the Swissy from pulling out its Dr. Jekyll and Mr. Hyde getup! The currency put up a mixed performance yesterday as it snatched 10 pips from the euro but gave away 6 pips to the dollar. What will it give us today?

You'd think that with yesterday's upbeat reports, the Swissy would chalk up more convincing gains. Swiss retail sales outperformed forecasts as they showed a 5.4% increase instead of just 4.5%. Likewise, the SVME PMI came in better than expected, increasing from 43.6 to 46.1 in the month of October.

Today, expect action on USD/CHF to pick up as the U.S. is set to publish its NFP report. To find out more about this major market mover, I suggest y'all check out my USD commentary. Peace and good luck trading, folks!

[PipDiddy]

With the Greenback on a roll, there wasn’t much that the Swissy could do last Friday. USD/CHF soared higher, testing as high as the .9400 psychological handle. The question is, can the franc bounce back or is will the losing continue?

Once again, we’ve got nothing on tap from Switzerland, but if we’ve learned anything from Friday’s price action, it’s that we really gotta pay attention to the markets as a whole! If it seems that the dollar is still benefiting from the unloading of riskier positions, we may just see USD/CHF finally puncture through the .9400 mark!

[PipDiddy]

With renewed concerns about Spain, the Swiss franc just couldn't strut its swag on the charts! Well, at least not in yesterday's trading. USD/CHF continued to trade higher, opening at .9415 and closing at .9437.

There wasn't any economic report released from Switzerland. Unfortunately for the franc, this made it vulnerable to risk aversion, sparked by Spain's refusal to accept a bailout.

Today the SECO consumer confidence index for the third quarter of the year. Be sure you don't miss it later at 6:45 am GMT as it could affect the franc's price action. The market expects the figure to show that pessimism among Swiss consumers continued to deteriorate with the forecast down at -21 from Q2's reading of -17.

If the report comes in better than expected though, we may just see the franc pare some of its losses. Make sure you're on your toes for it!

[PipDiddy]

Looks like we’re gonna be in for quite a battle between the bulls and the bears on USD/CHF! Yesterday’s price action resulted in a doji-like candle, which means that we’re seeing some indecision in the markets right now. Who will prevail, the bulls or the bears?

The SECO index came in slightly better than projected, printing at -17 once again, after it was expected to dip to -21. This indicates less pessimism amongst Swiss consumers, but also marks that 7^th consecutive month that the index has printed below 0.0.

Today at 8:00 am GMT, the SNB will be releasing data on the current level of its foreign reserves. Take note that reserves have been climbing the past six months, as the SNB has been defending the EUR/CHF peg. If it turns out that reserves dropped from last month’s level of 429.5 billion CHF, it could lead to a Swissy rally, as it would indicate less interest in the SNB to protect the peg.

Later on at 8:15 am GMT, monthly CPI figures will be released. Expectations are that inflation remained steady at 0.3%. In any case, I don’t really see this as a market mover, as there hasn’t been any speculation that the SNB will be changing interest rates anytime soon.

[PipDiddy]

That's what you get when negative data rolls in! Worse-than-expected data from Switzerland forced the Swiss franc to give up some ground against the dollar. USD/CHF tapped an intraday low of .9380 only to skyrocket up the charts and finish the day 16 pips above its opening price at .9448.

The CPI report for October printed at 0.1% and disappointed expectations which was for a 0.3% increase. Remember that deflation is one of the biggest issues of the Swiss economy. And so, the worse-than-expected inflation data only highlighted the economy's weakness.

That, as well as risk aversion following the European Commission's worried remarks about the EZ economy, didn't seem to sit well with traders.

Heck, it looks like markets merely shrugged off the SNB's foreign currency reserves report which printed lower at 424.4 billion CHF in October than September's reading of 429.5 billion CHF.

Our forex calendar doesn't have any top tier data due for the franc today. This probably means that market sentiment would dictate its price action on the charts. So be sure to gauge the market's mood before pulling the trigger!

[PipDiddy]

Thursday turned out to be a directionless day for USD/CHF. After opening the day at .9449, the pair bounced around a relatively tight 42-pip range before closing the U.S. trading session at .9458.

Switzerland’s unemployment report released yesterday confirmed some bad news. It showed that joblessness has indeed risen to 3.0% in October. The unemployment rate had only been at 2.9% the month prior.

No economic data releases scheduled to be published in Switzerland today but there are some tier 2 reports coming out of the euro zone (French and Italian Industrial Production, German CPI) that could indirectly affect the Swissy’s price action. Keep a close eye on them as better-than-expected results could also boost the Swissy.

[PipDiddy]

It looks like there's just no stopping USD/CHF's rise! With risk aversion still the dominant theme in Friday's trading, the pair tapped a new 9-week high at .9500. It then finished the day 29 pips above its opening price at .9487.

The lack of economic data from Switzerland left the franc vulnerable to market sentiment. Unfortunately for the currency, concerns about Europe's economic growth, Greece's next tranche of aid, and the U.S. fiscal cliff kept traders away from higher-yielding currencies, seeking instead the safety of the dollar and the yen on Friday.

We still don't have anything for the franc in today's trading. With that said and given its performance last week, it would do you well to keep an ear out for updates from the euro zone and the U.S.! Just keep in mind that the franc usually does well when risk appetite is up. Good luck!

[PipDiddy]

Booooooooooooring! The lack of economic catalysts kept the Swissy from exhibiting volatility yesterday. USD/CHF simply moved within a 50-pip horizontal channel the entire day, with the upper boundary of the range located just below the .9500 handle and the lower boundary at .9450.

Today, only one news report will come out from Switzerland. At 8:15 am GMT, the country’s Producer Price Index (PPI) will be released. It’s projected to show that prices increased 0.2% in October after rising 0.3% in September. A rising PPI is normally considered bullish for the domestic currency. When manufacturers pay more for goods, the additional costs are usually passed on to consumers, which could result in a higher inflation rate.

[PipDiddy]

For the second day in a row, the franc snuck a couple of pips away from its counterparts. USD/CHF declined by another 5 pips while EUR/CHF went down by another 13 pips. And to think that Switzerland printed a disappointing data!

Switzerland released its PPI report yesterday, which showed that producer prices fell by 0.1% in October. This is not only weaker than the previous 0.3% uptick, but also lower than the 0.2% growth that analysts were expecting.

Today at 11:00 am GMT we’ll see the country’s ZEW economic expectations data. The report had improved from -34.9 to a -28.9 reading in September, so watch your news wires closely to see if we’re about to see an uptrend for the report!