Arnaud Masset
Swissquote Bank Ltd
Swiss trade data came on the soft side in April, highlighting the negative effects of a high level of political uncertainty that stemmed from the French elections and Brexit talks. Exports contracted 2.5% m/m in April compared to a downwardly revised reading of 1.8% in the previous month. On the contrary, imports rose 2.6% from 0.6% a month earlier. Accordingly, the trade balance printed at CHF 1.97 billion, the lowest level since December 2014 when it came in at CHF 1.51 billion.
After a short but encouraging recovery in March, the Swiss Watch industry experienced rough market conditions in April. Exports contracted 5.7% y/y as the demand from Hong Kong and the USA, the two largest importers, contracted significantly: -16.8% and -19% respectively. On a more positive note, the exports to mainland China and the United Kingdom kept their positive momentum, thereby limiting the damage. The disappointing April trade figures are a good reminder that a unified and stable European Union is a necessary ingredient for a successful Swiss economy.
EUR/CHF was treading water at around 1.0935 this morning. From a technical standpoint, the 200dma currently lying at 1.0784 remains the strongest short-term support, while on the upside the 1.10 psychological threshold will act as resistance.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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