Daily Economic Commentary: Switzerland

Make way for the king of the pip streets! The franc trampled over its major counterparts yesterday as risk aversion persisted in markets. For one, USD/CHF dropped to an intraday low of .9234 before capping the day with a 72-pip loss at .9263. Meanwhile, EUR/CHF also slipped by 48 pips to 1.2784.

Aside from risk aversion pushing the low-yielding currency to record highs against the Greenback, maybe Switzerland’s employment level report also provided the franc support. The data clocked in at 4.09 million in the fourth quarter, which is a bit ahead of the 4.08 million number in the third quarter of 2010.

We’ll see if the red flag due in Switzerland today will boost the franc further. At 10:30 am GMT the KOF economic barometer will be released. The index of 12 economic indicators was at an index number of 2.10 in January, so a higher number might make the franc more appealing to my risk-hatin’ friends.

Swissy bulls eased off the gas pedal last Friday in spite of a strong KOF economic barometer reading. USD/CHF climbed 21 pips to .9283 while EUR/CHF slowed its descent and finished 17 pips lower at 1.2767.

Even though the KOF economic barometer exceeded forecasts when it ticked up from 2.16 to 2.18, the Swissy had difficulty gaining new ground. The tension in Libya has been easing as of late, so the Swissy has been losing a bit of its appeal now that risk aversion seems to be subsiding.

Let’s see if this week’s releases can get Swissy bulls riled up again.

The data releases will begin tomorrow with Switzerland’s Q4 GDP. Although forecasts are for growth to slow from 0.7% to 0.5%, SNB President Hildebrand has hinted of the possibility of an upside surprise. Tune in at 6:45 am GMT tomorrow to see if the SNB top dog is right!

After that, we’ll visit the SVME PMI report, which is anticipated to show a rise from 60.5 to 60.7 for the month of February.

The last release of the week will be made on Thursday at 8:15 am GMT. Switzerland’s retail sales report is scheduled to be rolled out and will probably show a 1.7% rise after the 0.8% decline in December. But as always, there’s a chance the report may print higher than expected, so be sure to tune in!

Bulls and bears, cast your bets now because the franc is up for grabs! With no Swiss data on tap, it chalked up mixed results against its two major counterparts. USD/CHFinched 8 pips lower to end at .9290 while EUR/CHF ticked 29 pips higher to finish at 1.2820.

The franc seems to have stalled from its recent powerful rally, but it might still be too early to say if a reversal is in the works. Will it eventually head into bear land, or will it continue treading into bull territory? Maybe today’s Swiss data will give it a push in the right direction.

At 6:45 am GMT, GDP data is due. Most analysts see the Swiss economy expanding by 0.5% in Q4, a softer figure from the 0.7% growth we witnessed in Q3. But as I said yesterday, SNB President Hildebrand believes there’s a possibility Switzerland’s growth may catch market players off guard with an upside surprise.

Following the release of GDP data, we have the SVME PMI report, which measures the strength of Switzerland’s manufacturing industry. According the economic soothsayers, the index will probably continue to indicate expansion by raising its reading from 60.5 to 60.8.

If these reports fail to get any movement out of the franc, then maybe you’ll get a chance to ride any waves risk sentiment may create. Good luck out there!

Taking advantage of the any weakness, that’s what the Swissy does best! With the dollar weaker in yesterday’s trading session, USD/CHF once again plunged lower on the charts, closing 60 pips lower to finish at 0.9237.

Look out for later today, when retail sales data is released at 8:15 am GMT. Rumors circulating the Alps is that retail sales are up 1.7% from levels a year ago. Considering how last Tuesday’s GDP and SVME PMI reports beat forecasts, can we expect the same from today’s report? If the data does show that Swiss shopaholics are at it again, then we could see the franc continue its climb up the charts.

Just like James Franco’s hosting job at the Oscars, the Swissy’s performance was a big flop yesterday! With horrendous retail sales weighing it down, it slumped down the charts against its two largest counterparts. EUR/CHF flew 202 pips to 1.3009 while USD/CHF leapt 82 pips to .9820.

With such a disappointing retail sales figure, could you blame traders for ditching the Swissy? Rather than recording an improvement to December’s 0.8% slide, Switzerland posted a heartbreaking 2.6% decline in retail sales in January. Not quite the number you’d like to see given that markets were anticipating a 1.7% rise. Instead, they had to stomach a second, bigger drop! I hate to say this, but could this be signaling the start of a downtrend for Swiss retail sales?

Now, I know this isn’t exactly the best way to end the week, but it looks like we’ll have a bit of time to chew on this as Switzerland won’t be releasing anymore reports today. But y’all know the NFP report is just hours away, so there’s still plenty of potential for market-rockin’ moves yo!

Just like Michael Phelps, the Swissy surprised markets when it made a comeback during Friday’s trading. USD/CHF ended the day 62 pips lower at .9259 while EUR/CHF took a swan dive from its opening price of 1.3010 to its close at 1.2949.

There were no reports on tap from Switzerland on Friday. But word on the street is that it might have been the hawkish remarks from the SNB that helped the currency pare some of its losses. SNB Vice Chairman Thomas Jordan hinted a possible rate hike when he said that interest rates in the country might not be sustainable anymore.

Of course, good ol’ risk aversion also might have also fueled the Swissy’s rally on Friday.

Once again, we don’t have anything on tap for the currency on our economic calendar today. But tomorrow, we’ll have the unemployment rate for February. The forecast is for an improvement to 3.4% during the month following the 3.5% uptick we saw in January. A better-than-expected figure will probably be bullish for the currency so be on your toes!

Action on the Swissy pairs were as tight as drums during yesterday’s trading. USD/CHF 40-pip range while EUR/CHF ended the day 5 pips lower from its opening price at 1.2924.

Perhaps the lack of economic reports from Switzerland kept the Swissy from showing off its slick moves on the charts. But don’t fret! Today we’ll have the unemployment rate for February on tap!

As I said yesterday, a 0.1% improvement in the rate of joblessness is expected with the forecast at 3.4%. A better-than-expected figure will probably be bullish for the Swissy so be on your toes!

Also make sure you gauge market sentiment before you take any trade. Take note that the Swissy usually rallies in times of risk aversion.

Boy, with the way traders abandoned the Swissy, you would think it had cooties or something! In spite of the fact that Switzerland’s unemployment rate ticked down, the Swissy was sold off like lemonade in the middle of summer. USD/CHF jumped 93 pips to close at .9355 just as EUR/CHF climbed 60 pips to finish at 1.3002.

As expected, the unemployment rate dropped from 3.5% to 3.4% last month, continuing the downtrend it began last year, when 3.9% of the population was jobless.

Good employment data but a weak Swissy? What gives?

One possible explanation for the Swissy’s slide is the fact that oil prices slid on news that Kuwait is in talks to boost oil production and that Muammer Qaddafi may be leaving Libya. This marked decreased support for the Swissy, which has recently been benefiting from the turmoil in the Middle East.

Let’s see if today’s CPI report can get the bulls back in the game. If you’ve been reading my daily economic roundups, then you’ll know what a pain in the neck deflation has been in Switzerland. However, with commodities on the rise and inflation spreading worldwide, we could finally see a healthy rise in prices this time around.

Forecasts have Switzerland’s CPI picking up from -0.4% to +0.3% in February. If we can get an even stronger figure than this, it might be enough to stoke demand for the Swissy once again.

With a positive CPI report as its Piptorade in yesterday’s trading, there was just no stopping the Swissy’s rally! Both USD/CHF and EUR/CHF fell by more than a hundred pips from their intraday highs. At the end of the day, the Swissy had bagged 56 pips from the dollar and 75 pips from the euro.

The CPI report showed that consumer prices increased by 0.4% in February, erasing the decline it posted in January and beating the consensus which was for a 0.3% uptick.

I bet Swissy bulls got all excited when the positive inflation figure was released especially because the SNB talked about the possibility of tightening earlier this week. But I wonder if there will be enough good vibes left from yesterday’s report to fuel the Swissy’s rally today when our economic calendar is blank for reports from Switzerland.

Perhaps market sentiment will provide the Swissy with support. If you’re planning to root for the currency, keep in mind that it usually rallies in times of risk aversion. Good luck!

Without anything economic yodels from Switzerland, the Swissy’s scorecard for yesterday’s trading was as mixed as a Long Island Iced Tea. USD/CHF ended the day 23 pips higher at .9321 while EUR/CHF parked 74 pips lower at 1.2853.

Risk aversion allowed the Swissy to stack up its gains against the euro. Too bad there wasn’t enough Swissy lovin’ to go around to fuel its rally against the dollar despite worse-than-expected reports from the U.S.

Aha! It looks like we still don’t have anything on tap on our economic calendar for the Swissy today. Boo! So make sure you gauge market sentiment first before you enter in your trades. Pay attention to U.S. retail sales and preliminary University of Michigan Consumer Sentiment reports too as these may affect the Swissy’s moves.

Be careful, ayt?

USD/CHF was off to a strong start last Friday but ended up erasing its gains when news of the earthquake in Japan hit the airwaves. The pair opened at .9321, climbed to a high of .9360, but winded up closing at .9293.

Let’s take a look at the economic events lined up for the Swissy this week.

On Wednesday, Switzerland is set to release its ZEW economic expectations report at 10:00 am GMT. Last month, the index improved from -18.4 to -17.2, showing that investors and analysts became slightly less optimistic then. Another uptick in the reading for March could push USD/CHF even lower.

Next up is the SNB monetary policy assessment due Thursday 8:30 am GMT. Although the central bank is expected to keep their Libor rate at 0.25%, traders will stay tuned to the accompanying statement which could rock the Swissy.

Lastly, on Friday, Switzerland will release its PPI figure for February. Producer prices are expected to have risen by 0.4% during the month, but we could be in for an upside surprise since commodity prices surged lately. Watch out for that at 8:15 am GMT.

The Swissy started the week off on the right foot, posting gains against both the dollar and the euro. USD/CHF dropped 31 pips to finish at .9244, while EUR/CHF managed to edge 19 pips lower to 1.2935.

So what boosted the franc yesterday? I’ve got a feeling that we’re still seeing some remnants of the risk aversion waves we saw last Friday, which is why the franc came out slightly ahead. Remember, the franc benefits when traders become more risk averse as it is considered a safe haven currency.

No reports headed Switzerland’s way today, but watch out for the German ZEW economic sentiment report coming out at 10:00 am GMT. The report sometimes causes a ruckus in the markets, so if we see a dramatically worse than expected result, we could see traders flock to the franc once again.

Just like Charlie Sheen’s statement shirts, demand for the Swissy surged in yesterday’s trading. It was able to tap a new high against the dollar at .9141 before finally ending the day at .9166 with a 100-pip win. Meanwhile, against the euro, it was able to bag 107 pips when EUR/CHF closed at 1.2828.

Fears of a nuclear disaster in Japan highlighted the Swissy’s ‘safe haven’ rep in the FX hood and fueled its rally. So with that said, you may want to get a feel of market sentiment to help you with your Swissy trades. If risk aversion continues to take a toll on the market’s mood, the Swissy will probably be able to stack up its gains. Boo yeah!

Also tune in later at 10:00 am GMT for Switzerland’s ZEW Economic Expectations report for March because a figure better than the -17.2 reading we saw in February will probably be bullish for the currency. Good luck!

Man, the franc is on a roll! The franc clobbered its major counterparts yesterday when risk aversion escalated in markets and sent the low-yielding currencies higher in the charts. Swissy lost another 82 pips while EUR/CHF plunged by a whopping 209 pips. Talk about being king of the pip-hills!

Switzerland’s ZEW economic report might have encouraged the franc bulls when it printed at an index number of -13.5, which is way better than its February figure of -17.2.

Aside from the possibility of another safe-haven buying, markets will be keeping tabs at Switzerland today for the SNB’s monetary policy statement at 8:30 am GMT. Though no change in interest rates is projected, the SNB is expected to be more upbeat on the economy after the unemployment rate dipped and economic growth had improved in the fourth quarter. They should be careful about being too optimistic though, as it could push the franc further up the charts and seriously affect the country’s exports.

But wait – there’s more! Aside from the SNB’s announcement, you might want to check out the SECO economic forecast for the quarter at 6:45 am GMT. Then, at 8:15 am GMT we’ll also get hold of Switzerland’s industrial production report, which is estimated to show a 4.7% growth for the fourth quarter. Lastly, London’s interest rate for 3-month Swiss franc deposits, or the LIBOR, will be released at 8:30 am GMT.

Stay at the edge of your seats for these big-hitters!

With the way the franc gained on its major counterparts yesterday, it seemed that it had already joined Rebecca Black in her quest for a fun, fun, fun Friday! While EUR/CHF dropped by another 22 pips to 1.2600, USD/CHF plunged to an intraday low of .8923 before closing with a 95-pip loss.

Of course, the Swiss National Bank’s positive comments on the economy provided the currency bulls an excuse to charge. Though the SNB kept its interest rates at 0.25% this month, it also upgraded its economic growth forecast for this year from 1.5% to 2%. What’s more, it also raised its inflation forecast from 0.4% to 0.8% this year and 1.0% to 1.1% for the next. Hmm, do I smell an interest rate hike in the works?

Today only Switzerland’s producer price index report at 8:15 am GMT is slated for release. The data printed at 0.1% in January, and this time around markets are expecting a rise of 0.4%. Keep your eyes glued to the tube though, because the G7 meetings are also watched closely by markets for any big announcements.

Good luck in your trades!

Risk appetite resulted to the Swissy’s mountain of pips crumbling like snow in an avalanche during Friday’s trading. It was able to cut down its loss against the dollar to 25 pips when USD/CHF closed at .9011, but it gave up a whopping 181 pips to the euro when EUR/CHF ended the day at 1.2781.

Much to the dismay of Swissy bulls, it seems like the G7 intervention helped bring back risk appetite. And you know what, with only two economic reports on tap from Switzerland this week, I have a feeling that that won’t be the last time we’ve seen the currency fall victim to market sentiment!

The first report we have scheduled is the trade balance report for February, due to be released tomorrow at 7:00 am GMT. Take note that it is expected to show that exports outpaced imports by 2.13 billion CHF during the month.

Then on Friday we have the SNB Quarterly Bulletin for the first quarter of 2011. You may want to tune in to this to get some hints about where the SNB’s monetary policy is headed.

Good luck and be careful, ayt?

Ouch! Despite not releasing any economic report yesterday, the franc lost against its major counterparts, sending USD/CHF 50 pips higher at .9046 while EUR/CHF also climbed by 96 pips to its 1.2865 closing price.

Instead of being disappointed though, word around the pip streets is that Switzerland’s officials are still worrying about the franc’s strength and its impact on the economy’s exports. You see, a strong franc would make its exports more expensive, which is bad news for the Swiss economy since its exports make up a huge part of their GDP.

We’ll know more about the Swiss National Bank’s sentiments today when SNB Chairman Hildebrand makes his speech at 10:30 am GMT in Geneva. But before you get hold of his announcement, you might also want to trade the news with Switzerland’s trade balance report on tap at 7:00 am GMT today. The report shows the difference between the country’s exports and imports, so stay glued to the tube and see if the Swiss officials have reasons to be worried!

The Swiss franc was in a tight race against the U.S. dollar yesterday, but USD/CHF was still able to keep its head below the .9050 minor psychological handle. There were hardly any big reports from the U.S. and Switzerland then, which was probably why the pair was unable to make strong moves.

In his speech yesterday, SNB President Philipp Hildebrand cautioned that the Swiss economy is vulnerable to global economic issues, such as inflation, the euro zone debt crisis, and the recent quake in Japan. Although he said that there are no immediate threats on the horizon, he maintained that they shouldn’t be complacent about their economy.

Switzerland won’t be releasing any red flags today but make sure you check out the U.S. daily roundup to find out which reports could move USD/CHF later on!

Talk about a wild day for the Swissy! USD/CHF made a beeline for the .9000 handle when the European session kicked off, only to reverse this move and close at .9085 at the end of the day.

It turns out that Portugal’s deficit reduction plan got rejected at parliament, forcing traders to flee to the safer European currency, which is the franc. After all, another possible bailout could be very damaging for the euro.

Switzerland isn’t set to unleash any big economic data for the rest of the week, but it has the SNB quarterly bulletin on deck. A more hawkish assessment from the Swiss central bank could allow the Swissy to carry on with its rally so make sure you read up on that report due tomorrow 10:00 am GMT.

In the meantime, keep your eyes and ears peeled for any updates on whether Portugal will give in to a bailout or not. EU summit developments could also steer the Swissy in a particular direction for the next few days.

Yeehaw! The franc’s price action yesterday was as wild and mixed as Happy Pip’s mixtapes when risk appetite in markets battled with worse-than-expected economic reports in other major economies. USD/CHF ended the day in a draw at .9086, but EUR/CHF leapt its way 78 pips higher at 1.2878. Meanwhile, GBP/CHF dropped like other pound pairs and closed at 1.4641.

The economic boards were empty in Switzerland yesterday, but the franc played along the markets’ improved appetite for high-yielding currencies. You see, recent economic events like Japan’s natural disasters and trouble in the Middle East have been pushing prices higher, and increasing the motivation of central banks to hike their interest rates.

Will the currency bulls end the week with a feast? Only the Swiss National Bank’s quarterly bulletin is on tap today at 10:00 am GMT, but keep close tabs on risk appetite in markets! I hear that the Economic Summit begins today, and that the U.S. is also set to release red flag reports!