Eur/chf Review

Eur/chf Review



EUR/CHF: Swiss Q2 GDP was weaker than expected (-0.1% q/q; consensus 0.2%) and significant downward revisions left an even larger shortfall on annual growth (0.5%; consensus 1.6%). For several reasons, however, we do not see these figures as game-changing for the SNB's EUR/CHF floor.
-Firstly, the downward revisions to historical growth make the data much easier to reconcile with other activity indicators and, secondly, exports are not a major factor in driving weakness (up 0.4% q/q in Q2). Finally, note that the SNB's policy is largely about fighting deflation risk and as such, the inflation indicators will generally carry more weight than the activity data. Assuch, the August CPI release (overnight tonight; consensus -0.4% y/y) is key.


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