Household sentiment improved only marginally and by less than expected in June. At minus 37, the unadjusted headline index was just a point stronger than its May outturn and a couple of points short of the market consensus. However, it was 4 points above its long-run average.

The modest headline gain mainly reflected a more optimistic economic outlook (minus 19 after minus 21) despite job security (unchanged at minus 37) holding well above its historic norm (minus 14). Buying intentions (minus 35 after minus 36) were also little firmer as 1-year ahead inflation expectations (99 after 104) erased much of May's 8 point jump.

Overall, the results point to a fairly flat trend in household confidence at levels consistent with modest growth of spending over coming months. Today's update leaves the Swiss RPI at a lowly minus 36 and the RPI-P at minus 25. In general, economic activity continues to underperform market expectations.

The SECO measure is expected to climb 3 points to minus 35 in June.

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.