CHF: Q2 equity outflows but large FDI inflows – Nomura

The Q2 Swiss balance of payments saw its current account surplus increase to CHF18.8bn with an improvement in the goods balance to CHF15.6bn from CHF9.9bn in Q1, notes the analysis team at Nomura.

Key Quotes

“Looking into the details, the CHF24.2bn foreign investor selling of Swiss equities is the largest since records began in 2000. But offsetting that historical record was the largest quarterly net FDI inflow Switzerland has ever seen with CHF63bn of inflows. This would explain why, even with the French election risk premium being removed in May, it took until July before EUR/CHF really began to accelerate its uptrend. We expect the equity outflows to continue to dominate the price action and expect EUR/CHF to continue its trend higher towards 1.20 over the coming year.”