NEW UNEXPECTED RISKS FOR SWISS ASSETS 2/3

11 Mar

NEW UNEXPECTED RISKS FOR SWISS ASSETS 2/3

Prior to the Middle Eastern escalation, the Swiss economy was already in a state of precariousness, having barely escaped a technical recession. Unlike the 2022 crisis, the current environment sees the franc losing its traditional safe-haven status to the dollar, directly exposing domestic markets to rising energy costs without the historical exchange-rate shield.

Key Points

  • The Swiss economy avoids a technical recession in Q4
  • The war in the Middle East also threatens Switzerland
  • Headwinds for the Swiss economy amid the oil shock
  • Leading indicators are largely lagging
  • Inflation likely to reverse course
  • New dilemma for the SNB ahead of its March meeting
  • The franc remains buoyed by geopolitical risks
  • Inflation risks are turning the fixed-income market upside down
  • Risks of a correction in real estate and equities