Euro area with a 9-year-high, Switzerland in recession
09 February 2015
Posted in
sentix Economic News
In February the composite indices for the euro zone and Germany both rise strongly. Against the background of the details given by the ECB on its coming QE programme 6-month expectations climb to their highest reading since February 2006 for the euro zone. For Germany the composite index even reaches an all-time high. The weak euro and the low price of oil may also have helped (as in the previous months). But this positive development also has a flipside: The weakness of the euro has led the Swiss National Bank (SNB) to give up on its de-facto peg to the common currency. By doing so, the SNB has sent the Swiss economy into recession – that is at least what the sentix Economic Index for Switzerland says as it collapses this month. For the “Global Aggregate” the composite index increases for the fourth time in a row because of the improvements for the euro zone and for Japan. At the same time, the slight setback for the US might be an indication that the US economy has peaked already in the current cycle.
Headlines of the month
- In February, the composite index for the euro zone increases strongly from 0.9 to 12.4 points. 6-month expectations even reach a 9-year high. The details on the coming QE programme by the ECB, announced at the end of January, should have been the main driver.
- For Germany the composite index also rises markedly and, with 35 points, reaches an all-time high!
- Against the backdrop of the Swiss Franc appreciation the composite index for Switzerland, however, collapses in February. It touches its lowest reading since July 2009 and now signals recession! Also of interest is the decrease of the US index which may be an indication that the US economy has already reached its peak in the current cycle.
