European session review: CHF mixed and little changed after slew of economic data from Switzerland

CHF traded mixed and little changed against other major currencies in the European session on Thursday, as investors assessed predominantly disappointing Swiss economic data.

The report from the State Secretariat for Economic Affairs (SECO) revealed a weaker-than-expected rebound in the Swiss economy in Q2. According to the report, Switzerland's GDP grew 1.8% q/q in the second quarter of 2021, recovering from a revised 0.4% q/q contraction in the previous quarter (originally a 0.5% q/q decrease), as many coronavirus restrictions were eased. Economists had forecast the Swiss economy would expand by 2.0% q/q. On a y/y basis, Swiss GDP grew 7.7% in the second quarter, following a revised 0.7% decline in the first quarter (originally a drop of 0.5%). This represented the strongest growth on record but was below economists’ forecasts for a 9.0% advance. 

Meanwhile, the data, which were provided by the Federal Statistical Office (FSO), showed that retail sales in Switzerland decreased 2.6% y/y in July, following an unrevised 0.1% y/y gain in the previous month. This marked the first annual decrease in retail sales since February. On m/m terms, retail sales fell 2.8%, recording their 4th consecutive monthly decline.

In addition, another report from the FSO unveiled a slightly faster than expected acceleration in consumer inflation in August. According to the report, the Swiss CPI rose 0.2% m/m in August, following a 0.1% m/m drop in July. Economists had forecast a 0.1% m/m uptick. In y/y terms, Swiss CPI climbed 0.9% in August after a 0.7% jump in July. This was the highest inflation rate since November 2018. Economists had expected an increase of 0.8%. Meanwhile, core CPI rose 0.2% m/m and 0.4% y/y.