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Its long history of running current account surpluses has left Switzerland with a net international investment position well in excess of 100% of GDP, making Switzerland one of the largest creditor nations of the world.

  • Forecasts

    CHF is very high, aided by risk aversion, and yet to reflect the lower terms of trade. Over time it will fall, with further FX intervention likely in any risk flare ups. Rates will be hiked, and yields will rise. download »
  • FX Notes

    The Swiss franc is near its lowest levels for a decade in real terms but is still much higher than in previous decades. If the terms of trade continue to decline, CHF may remain under downward pressure. download »
  • Focus Notes

    As there are reasons to believe fair value for CHF has risen and current account sensitivity to the franc has decreased, we limit the size of our CHF short position relative to what it would otherwise be. download »
  • Economics

    • GDP growth has rebounded slightly, with stronger momentum in final sales. The labour market, the external balance and the fiscal balance are still performing solidly. Core inflation is near its mean. download »
  • Markets

    • CHF is around its real mean. Markets price in a small chance of one 25bp rate hike over the coming two years. Yields are still very low; the curve has steepened slightly but is flat. Equity returns have been mid-tier. download »
  • Investing

    • Once inflation and risk appetite rise, policy focus may shift to hiking rates. Bond yields look too low relative to growth, inflation and short rates. Lower terms of trade argue for a fall in CHF but safe haven flows are a risk. download »