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EUROPEAN INFLATION: September CPI Surprises to the Downside

EUROPEAN INFLATION
SwitzerlandData BulletCEEMEABulletGlobalFixed Income BulletsForeign Exchange BulletsRegionMarkets

Swiss CPI inflation printed below consensus at 0.8% in September (vs 1.0% cons; 1.1% prior), and -0.3% M/M (vs -0.1% cons; 0.0% prior). Core CPI came lower than expected, also, at 1.0% Y/Y (vs 1.1% cons and prior) and -0.2% M/M.

  • Regardless of the downside surprise vs consensus, this brings in Q3 average headline inflation at 1.07% Y/Y - in line with the 1.1% SNB forecast from its meeting last week, even if only barely.
  • The main categories appear to indicate that the headline drop vs August was mainly driven by energy prices (as was to be expected on the back of a base effect). Services / domestic inflation meanwhile remained broadly unchanged:
    • Domestic 2.0% vs 2.0% prior
    • Imported -2.7% vs -1.9% prior
    • Services 2.1% vs 2.2% prior
    • Goods -0.9% vs -0.7% prior
    • Energy and fuels -0.6% vs 2.5% prior
  • Housing rental inflation did not see its quarterly price update this month (due November).
  • On first sight, regardless of the headline drop, the print should not warrant a material reassessment of SNB rate expectations - they have described further cuts as "likely", and that remains the base case.
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Swiss CPI inflation printed below consensus at 0.8% in September (vs 1.0% cons; 1.1% prior), and -0.3% M/M (vs -0.1% cons; 0.0% prior). Core CPI came lower than expected, also, at 1.0% Y/Y (vs 1.1% cons and prior) and -0.2% M/M.

  • Regardless of the downside surprise vs consensus, this brings in Q3 average headline inflation at 1.07% Y/Y - in line with the 1.1% SNB forecast from its meeting last week, even if only barely.
  • The main categories appear to indicate that the headline drop vs August was mainly driven by energy prices (as was to be expected on the back of a base effect). Services / domestic inflation meanwhile remained broadly unchanged:
    • Domestic 2.0% vs 2.0% prior
    • Imported -2.7% vs -1.9% prior
    • Services 2.1% vs 2.2% prior
    • Goods -0.9% vs -0.7% prior
    • Energy and fuels -0.6% vs 2.5% prior
  • Housing rental inflation did not see its quarterly price update this month (due November).
  • On first sight, regardless of the headline drop, the print should not warrant a material reassessment of SNB rate expectations - they have described further cuts as "likely", and that remains the base case.