Swiss 2Q Industrial Outputs Increase, Annual Rate of Production Falters
Industrial outputs in Switzerland increased 2.7% in the second quarter versus expectations for a 7.3% rise, with the annual rate of production falling 14.9% from the previous year. The breakdown of the report showed new orders plunged at an annual rate of 17.5% after falling 17.9% in the first three-months of the year, with orders on hand slipping 16.4% during the three-months through June, while inventories slumped 4.0% from the previous year. The data foreshadows a weakening outlook for the Swiss economy and conditions are likely to get worse as the central bank forecasts economic activity to remain subdued throughout the following year, and the Swiss National Bank may continue to ease policy further over the coming months in an effort to stem the downside risks for growth and inflation. Nevertheless, the SNB is widely anticipated to hold the benchmark interest rate at 0.25% later this week in order to steer the ailing economy out of recession, and speculation for another currency intervention may weigh on the Swiss franc as policy makers attempt to temper the appreciation in the exchange rate.