Swiss CPI came in firmer than expected in July, with headline inflation unchanged mom versus forecasts of a -0.2% mom decline. Core CPI — which excludes fresh and seasonal products, energy, and fuel — fell slightly by -0.1% mom, while domestic product prices rose 0.2% mom and imported product prices dropped -0.9% mom.
On an annual basis, headline CPI ticked up to 0.2% yoy from 0.1% yoy, also ahead of the 0.1% yoy forecast. Core CPI accelerated from 0.6% yoy to 0.8% y/y yoy. Domestic product inflation remained steady at 0.7% yoy, while imported product prices, although still negative, improved from -1.9% yoy to -1.4% yoy.
Today’s data modestly ease concerns that Switzerland is slipping back into outright deflation. There has been persistent speculation that the SNB might resume negative interest rates following a series of cuts that brought the policy rate back to 0.00%. But July’s inflation uptick may buy policymakers time ahead of the next meeting on September 25.
In the background, the slight weakening in Swiss Franc, as global markets stabilize and trade tensions ease, helps reduce deflationary pressure. If August CPI data show further improvement, expectations will likely shift toward a steady hold in September rather than another policy adjustment.
