Producer and import prices in Switzerland fell 0.5% in March, which was much greater than the 0.2% decline projected by economists, while the annualized rate slipped to a 10-year low of -2.8% from the previous year. The data reinforces the dovish outlook held by the Swiss National Bank as policymakers expect price growth to fall 0.5% this year.
[U][B]Fundamental Headlines[/B][/U]
[I]• AIG Nears Sale of Car-Insurance Unit [/I]– Wall Street Journal
[I]• LG Display Posts Second Straight Loss[/I] – Wall Street Journal
[I]• China’s quarterly growth slows to 6.1% [/I] – Financial Times
[I]• Euro Falls on Concern of ECB Split Over Rates; Stocks Advance, Oil Climbs[/I] – Bloomberg
[I]• Bernanke Frets as Variable Notes Strip Taxpayers From Houston to New York [/I]– Bloomberg
[B]CHFUSD[/B] – Producer and import prices in Switzerland fell 0.5% in March, which was much greater than the 0.2% decline projected by economists, while the annualized rate slipped to a 10-year low of -2.8% from the previous year. The data reinforces the dovish outlook held by the Swiss National Bank as policymakers expect price growth to fall 0.5% this year, and as the board pledges to mitigate the risks for deflation, SNB Governor Roth may continue to intervene in the currency markets in an effort to stem the appreciation in the Swiss franc. For more news and resources, visit the new Swiss franc Currency Room.
[B]EURUSD[/B] – Price pressure in the Euro-Zone increased 0.4% in March, while the headline reading for inflation held steady at 0.6%, which was in-line with the preliminary release, and the outlook for price growth remains bleak as the CPI holds at its lowest level since the euro was introduced in 1999. On the other hand, the core measure for inflation, which excludes volatile items such as food and energy, crossed the wires stronger than expected as the annual rate increased 1.5% during the month amid expectations for a drop to 1.4%. Meanwhile, a separate report showed that industrial outputs dropped another 2.3% in February after falling 2.4% in the previous month, which pushed the annual rate to a record low of 18.4% from a revised reading of 16.0% in January, and the data continues to reinforce a dour outlook for growth and inflation as economic activity deteriorates at a record pace. As price growth remains well below the 2% target held by the ECB, policymakers may continue to take unprecedented steps to soften the landing of the economy as the central bank maintains their one and only mandate to ensure price stability. Discuss the topic and your trade ideas in the EUR/USD Forum.
