The Swiss economy remains robust and Swiss companies are optimistic, with order backlogs, stable employment and high capacity utilization. Inflation was quiet in January, with headline consumer prices +0.60% and -0.30% in yearly and monthly terms. Overall prices advanced 0.50% annually (prior: 0.30%), the highest jump since August 2018. Currently trading at 1.0027, USD/CHF is expected to head along 1.0030 short-term. We don’t see the Swiss National Bank putting an end to its negative interest rate policy for a while.

Indeed, the Swiss economy remains resilient while its main client, the EU, is facing severe downgrades in growth outlook. Italy’s central bank, for instance, recently slashed its GDP forecast for 2019 from 1% to 0.60%. The announcement caused the revolt of Italy’s coalition government, including leaders from Lega and Five Star Matteo Salvini and Luigi Di Maio, who condemned the statement and threatened to remove the bank’s independence.

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