The new (unadjusted) monthly sentiment index improved from last October's revised minus 53 and December's minus 44 to minus 41 but fell short of the (tentative) market consensus and its minus 35 reading a year ago. However, the monthly profile shows steady gains since the start of the fourth quarter and the January print was just above the minus 42 long-term average.

Amongst the components, the past financial situation (minus 59 after minus 64) made useful ground as did the financial outlook (minus 40 after minus 46) and, to a lesser extent, buying intentions (minus 38 after minus 40). The economic outlook (minus 28 after minus 29) was little changed but expected inflation (105 after 109) declined further from last September's peak (118).

Overall, the results are cautiously optimistic but hardly in line with a household sector that is about to provide a significant boost to real GDP growth. To this end, today's update puts the Swiss RPI at minus 32 and the RPI-P at minus 15, both values indicating economic activity in general once again lagging market expectations.

The new monthly series is expected to see the January index rise from October's minus 40 to minus 28.

The State Secretariat for Economic Affairs (SECO) compiles a quarterly survey of consumer attitudes on present and expected economic and financial conditions. The survey covers around 1,200 Swiss households and results are synthesised into a single summary consumer climate index that attempts to measure consumer sentiment.

The pattern in consumer attitudes and spending is often a major influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Consumer spending accounts for a major portion of the Swiss economy, so investors want to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. An increasing important element of the survey is the question concerning current buying intentions.