Edward Culchenko
According to the results of the recent survey conducted by UBS, the level of consumer inflation increased in Switzerland in February 2016. At the same time, the recent KOF survey indicate the likelihood of a stronger Swiss economy in the near future.
To be more specific, the consumer activity indicator increased all the way up to 1.53 in February as oppose to January’s 1.45. The growth was mainly based on higher demand for automobiles, which gained 1.2% over the reporting period as opposed to the same one 12 months ago. UBS reports that the amount of car sales reached the highest level since February 2015, when the importers cut the prices due to the fact that the Swiss National Bank unpegged the Swiss Franc from the common European currency back then. At the same time, retailers seem to express less bright expectations. The corresponding index dropped from -8 all the way down to -11 over the reporting period.
Meanwhile, KOF anticipates economic growth in Switzerland in the near future. The thing is that the KOF index of leading economic indicators dropped down to 102.5 points in March as opposed to 102.6 points in February. This was a minor drop, which turned out to be lower than expected. The thing is that analysts had anticipated a drop all the way down to 101.9 points. Speaking of perspective, the companies that participated in the KOF survey expect an increase in the amount of orders and output.
FOREX
Meanwhile, the Swiss Franc keeps on gaining value against the U.S. Dollar within the scope of the same mid-term trend, which means that USDCHF is going down. To be more specific, the currency pair is going down within the scope of wave 3/С of level Daily2. There is a minor wave inside of it – wave 3/C.
The closest targets are such levels as 0.9545/19, 0.9480, 0.9449/32, 0.9376/45. At the same time, a break above MF pivot 0.9751 as well as the top of the descending MF sloping channel is going to put an end to the existing strength of the Swiss Franc against the U.S. Dollar.
Edward Culchenko
