Swiss KOF Barometer Hits 101.2, Reversing Sub-Trend Stretch
The KOF Economic Barometer rose to 101.2 in June, beating forecasts and returning above its long-term average. Manufacturing drove the gain, reducing pressure on the SNB to cut rates further.
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Switzerland's KOF Economic Barometer rose to 101.2 in June, up from 98.6 in May and above the consensus forecast of 99.4. The reading puts the index back above its long-term average of 100 after several months below that level.
The institute said the improvement came mainly from manufacturing, where production-related indicators strengthened. Demand-side measures also firmed, with foreign orders and private consumption both contributing to the rise. "The outlook for the Swiss economy improves noticeably," KOF said, adding that the barometer had moved "slightly above its average" after a stretch of below-trend readings.
The barometer is a leading indicator for Swiss GDP. A move above 100 signals that growth is accelerating after a sluggish first quarter. That could reduce the case for further Swiss National Bank rate cuts. The SNB lowered its policy rate earlier this year as inflation eased and the franc strengthened. Faster momentum, if sustained, gives the central bank room to hold rates steady, especially with price pressures still subdued.
For the Swiss franc, the data adds to a mixed European picture. German unemployment dipped last month and French CPI slipped below 2%. The KOF reading reinforces the sense that the euro zone's larger economies are stabilising, which may cap safe-haven demand for the franc. Traders watching the currency can track positioning through AlphaScala's currency strength meter and weekly COT data.
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