Swiss SVME-Purchasing Managers Index (SEP)
Switzerland's main factory activity report cooled much quicker than expected last month. The SVME index reported a drop to 57.6 in September, a 7.5 percentage point drop, versus expectations of a much more controlled decline. Now, from an eight-month high, the indicator is now resting at its lowest point since December of 2005. Looking at the fundamental currents influencing this report, a pull back was expected. In August and September, Swiss business leaders had to deal with a credit market freeze that threatened profit and investment. The weight on sentiment was clear through stock prices and related sentiment gauges. The ZEW investor confidence report for the same period plunged to a new low of its own over the same period. Data from the bigger trends may help to anchor factory activity in positive territory for the months ahead however. GDP over the second quarter accelerated to a 2.8 percent annual pace, led by strong export and domestic demand for Swiss-made goods. What's more, the KOF Leading indicators composite for September unexpected jumped to a high not seen in a year. If equities continue their rebound and Euro-Zone growth sustain its steady gait, Swiss manufacturing will likely perform in step.
In the minutes after the PMI number, the Swiss franc was sold. However, an ealier run up in carry trades already took USDCHF on a 40 points run and left little follow through for the PMI number just below 1.1700.