Growth is slowing as expected. Stagnation likely in Q3 and Q4. Leading indicators uncertain and mixed. Deflation setting in. The SNB must cut rates significantly. Swiss bonds are unattractive. Swiss equities under threat.

Key points

• Moderate growth in Q2 confirms expected slowdown
• High risk of stagnation in Q4
• Leading indicators more nuanced and mixed
• CPI and PPI indices settle into deflation
• The SNB must act by lowering its rates by 50 basis points
• The franc benefits from a unique context
• Swiss bonds offer no prospects
• Serious threats weigh on Swiss equities

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