fundamental alert

Switzerland Retail Sales Unexpectedly Rise 6.4% as Electronics and Household Spending Surge

Tuesday, 18 November 2008 07:29:24 GMT  |  DailyFX Research

Swiss retail sales were up 6.4% on the year in real terms in September, after being flat on the year in August. Swiss retail sales are notoriously volatile but the 3m y/y trend rate also improved, to 4.2% from 2.3%. However, when adjusted for the number of shopping days, sales were up just 2.4% y/y, after a 4.0% increase in August and the 3m y/y rate decelerated to 2.9%, versus 3.7% in August. Overall, data suggest that the retail sector, although having held up relatively well this year, is displaying a downward trend. We are likely to see weaker retail sales figures ahead as consumer demand falters on the back of the credit crunch and weaker confidence.

Meanwhile, Swiss Franc (CHF) maintained an easier tone, with the crosses holding up on short covering activity via the euro and sterling, which lifted EUR-CHF to overnight highs of 1.5179 and GBP-CHF to 1.8084. Swiss retail sales rose 6.4% in September when adjusted for inflation, although when adjusted for both inflation and shopping days the rise was just 2.4% y/y. The 3m y/y trend rate indicates an improved 4.2% from 2.3%. The data indicates that areas of the Swiss economy are still holding up, although consumer demand is expected to tail off ahead as weaker sentiment impacts the economy. Elsewhere, USD-CHF maintains a hold above 1.2000 after it extended its recent trend high to hit 1.2022 in early trade. The CHF is still underperforming its European counterparts, with interest rates still at relatively low levels, while the dollar pairing continues to benefit on risk aversion. Near-term orders include USD-CHF offers at 1.2025-30 and 1.2040-50, while EUR-CHF sell-interest is tipped at 1.5180 and just ahead of 1.5200.

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