Syz the moment

Monthly exports increased 3.1% to 1.9 billion Swiss francs ($2.2 billion) by value, the Federation of the Swiss Watch Industry said Tuesday. Growth was as high as 11.8% in the first half of last year. The number of timepieces exported rose 2.9% to 1.2 million as shipments of the Swatch brand’s Blancpain and Omega collaborations drove demand at the low end. The number of exported watches priced above 3,000 francs fell 4.5% in January, even as their value rose 4.3%, the Federation said in a statement. At the same time, the number of watches exported with a wholesale price of less than 200 francs surged 5.5% driven by the Swatch Group AG’s namesake brand. Exports to the US, the biggest market for Swiss timepieces, rose by a modest 2.2% by value. Mainland China exports gained 5% while shipments to Hong Kong fell 4.7%. Exports of watches hit a record 26.7 billion Swiss francs by value in 2023, but the rate of sales growth slumped to just 3.6% in the second half of the year as consumers pulled back. source : swissinfo

The inflation rate in Switzerland is already well below the target of 2%. At 1.7%, it is a full 2ppts lower than the German rate. Source: Bloomberg, HolgerZ

Switzerland’s government sees next year’s inflation within the central bank’s target range, the latest evidence supporting a likely hold from policymakers this week. Consumer prices will grow at an annual 1.9% in 2024, in line with the previous forecast, the State Secretariat for Economic Affairs said on Wednesday.
Source: Bloomberg

Source: World of statistics

Source: Morgan Stanley

- The SNB left today its key rate unchanged at 1.75%, debunking market expectations of an additional 25bp hike - The slowdown in inflation, the magnitude of the monetary policy tightening already implemented (CHF short term rates were still negative a year ago) and rising risks surrounding the global outlook underpin this decision. - Indeed, as inflation is within the SNB target (1.6%, in the 0%-to-2% target), economic activity is slowing down (0% GDP growth in Q2 2023) and the Swiss franc remains firm, the case for further tightening had turned much less compelling in the past few weeks. Unlike the ECB, forced to hike last week due to an inflation rate still much above its target, the SNB had very good reasons to pause today and adopt a cautious stance. - The SNB doesn’t rule out additional hikes in the future if warranted, but the combination of slowing growth in Europe (likely to dampen underlying price pressures) and of the strength of the currency are highly likely, in our view, to keep Swiss inflation dynamics in check in the months ahead.

The Swiss national bank unexpectedly leaves its policy rate unchanged at 1.75%. Market was estimating the probability of a 25bps hike at more than 70% yesterday.
USDCHF broke the 200 daily moving average of 0.9036 and now trading higher over 0.9060.
EURCHF also trading higher at 0.9650.

A group of international bond investors is drawing up plans to sue Switzerland in the US courts for expropriation over the losses they suffered after the state-orchestrated rescue of Credit Suisse. The case is being brought together by law firm Quinn Emanuel, according to people familiar with the matter. Quinn Emanuel is already suing Switzerland’s financial regulator, Finma, over its decision to wipe out $17bn of Credit Suisse bonds when the bank was taken over by UBS six months ago. Lawyers at Quinn Emanuel are laying the groundwork to sue Switzerland in the US, where they believe there is a greater chance of convincing a judge to waive the country’s sovereign immunity rights. The suit could be filed by the end of the year, though it is not certain to proceed, according to people involved in the discussions.