Investors are becoming increasingly downbeat about the prospects for the Swiss economy, with no respondents in a survey issued on Thursday expecting growth in the next six months. The ZEW investor sentiment index sank to -75.7 points in September, its weakest reading since December 2008.
"None of the respondents anticipates positive economic momentum on a six-month horizon," said Credit Suisse, which issues the indicator in co-operation with the German ZEW economic research institute. "In fact, the majority of survey participants still expect the economic picture to deteriorate." At its policy review last week, the Swiss National Bank said the outlook for advanced economies had worsened, with momentum in Switzerland suffering due to the strong franc and slowing global demand. To shield the Swiss economy from a recession, the SNB on September 6 implemented a cap on the Swiss franc at 1.20 per euro.
"Although concerns over euro zone debt and the global outlook provide a drag, the outcome could have been worse without the SNB's action," Informa Global Markets analyst Nikola Stephan said. "The survey also suggests that the SNB still has room to manoeuvre and potentially lift the euro/Swiss floor further as inflation expectations have fallen even further."
According to the ZEW survey, the proportion of respondents who forecast a pick-up in inflation in the coming six months fell to 10.8 percent, its lowest point since April 2009. The share who expect a decline in inflation continued to climb, to 45.9 percent, the ZEW said.