No. 99, September

In August, the KOF Business Situation Indicator for the Swiss private economy rose for the second consecutive time (see G 9). Since the ‘Brexit’ vote, the Business Situation Indicator has had an upward tendency. This means that Swiss companies currently see little effect from the British vote. In fact, the gradual recovery of the Swiss economy is continuing.

Are stock market excess returns in ten industrialised countries only predictable by means of lagged U.S. stock returns? “It depends” would be the right answer. The claim stands the test in recession but not in normal times, as shown in a new KOF Working Paper.

At least since the removal of the exchange rate floor, there has been much speculation regarding retail tourism by Swiss residents abroad. The survey concerning payments and cash withdrawals carried out by the Swiss National Bank (SNB) enables both structural and contingent conclusions to be drawn concerning the payment practices of Swiss residents both at home and abroad. Half of transactions paid for with Swiss credit cards abroad are concluded online.

Brexit will be keeping Europe busy for a long time, and its long-term consequences are not yet foreseeable. According to a KOF survey, this means that the direct consequences are still negligible for Swiss exporters. However, Switzerland's negotiating position with the EU is not expected to be improved by Brexit.

The pace of the Eurozone economy has slackened. Given a rather moderate 0.3 per cent increase in production over the previous quarter, gross domestic product (GDP) expanded more slowly in the second quarter 2016 than in the preceding quarter. In France and Italy, aggregate production even stagnated.