SNB kept the sight deposits rate unchanged at -0.75% as widely expected. It also remained “remains willing to intervene in the foreign exchange market as necessary, in order to counter upward pressure on the Swiss franc”. The Swiss Franc “remains highly valued”.
The new conditional inflation forecasts for 2021 and 2022 were revised higher “primarily due to higher import prices, all all for oil products and for goods affected by global supply bottlenecks”. New forecast stands at 0.6% for 2021, 1.0% for 2022 and 0.6% for 2023, comparing to September forecasts of 0.5% for 2021, 0.7% for 2022, and 0.6% for 2023. They based on assumption that policy rate remains at -0.75% over the entire forecast horizon.
As for the economy, the baseline scenario is a “continuation of the economic recovery next year”. SNB expects GDP growth of around 3% for 2022 while unemployment is “likely to decline again somewhat”.
France PMI manufacturing dropped to 54.9, PMI services dropped to 57.1
France PMI Manufacturing dropped from 55.9 to 54.9 in December, below expectation of 55.3. PMI Services dropped from 57.4 to 57.1, above expectation of 55.6. PMI Composite dropped from 56.1 to 55.6.
Joe Hayes, Senior Economist at IHS Markit said:
“France’s economy ended the fourth quarter with another solid monthly expansion in output, but the headline number doesn’t really tell us the full story as trends by sector are still widely divergent.
“Growth in France is, at present, entirely reliant on the service sector as manufacturing output fell for the second time in the past three months. Weak demand for goods, supply shortages and the consequent impact these have on production is weighing heavily on manufacturers. Meanwhile, although services firms are continuing to see rising activity levels, growth slowed from November as some firms saw new business intakes dented by the latest wave of COVID-19 infections hitting France right now. Tourism has also been a welcomed pillar of additional support to the services sector since the middle of this year, but December data showed new business from overseas falling amid the emergence of the Omicron variant.
“It’s clear that the risks to the economy have grown substantially since November, and a fresh wave of COVID-19 infections could de-rail services activity. While France has so far distanced itself from implementing virus-combatting measures of the same stringency as other parts of Europe, changes in business and consumer behaviour in the face of the Omicron variant could dent the recovery.”
Full release here.