The monthly sentiment measure improved a little more than expected in March. At minus 38, the unadjusted headline index was 3 points stronger than the market consensus and up from minus 42 in February. It was only unchanged from its level a year ago but the trend is at least modestly up and the latest outturn was above the minus 42 long-run average.

Amongst the main components most monthly changes were again quite limited but there were useful gains in the economic outlook (minus 23 after minus 32), planned purchases (minus 58 after minus 64) and job security (minus 22 after minus 26). Of note too, the one year ahead inflation gauge (95 after 102) hit a new low.

Overall, the results are consistent with a gradual improvement in household sentiment which should help to underpin consumer spending over coming months. However, they also leave both the Swiss RPI (minus 29) and RPI-P (minus 15) below zero, showing that economic activity in general is underperforming forecasts.

The confidence index is expected to be little changed at minus 41 in March.

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.