June CPI Preview - Few Idiosyncratic Factors

Swiss headline inflation (released 0730BST/0830CET) is expected to have remained steady on a Y/Y basis for the second consecutive time, with consensus standing at +1.4% Y/Y and +0.1% M/M (vs +1.4% and +0.3% in May, respectively). Core CPI is expected to have accelerated slightly, however - consensus stands at +1.3% Y/Y (vs +1.2% May).

• A print in line with consensus would bring in overall Q2 inflation at 1.4%, matching the SNB June meeting forecast. Looking further ahead, the SNB projects inflation to accelerate slightly, to 1.5% Y/Y in Q3.
• There seem to be few idiosyncratic drivers with a clear upward/downward impact on the yearly rate for this release. Rental prices will not see an index update in June, and FX risk on imported inflation appears subdued. As such, the release will provide a good view of the development of underlying inflationary pressures, which were central to the June cut.
• The range of estimates are smoothly distributed - out of 18 estimates, 3 are looking for 1.5% Y/Y headline, 11 for 1.4%, and the remaining 4 for 1.3%. For the core rate, 4 submissions are looking for 1.3% and one for 1.2%.
• SNB President Jordan mentioned in the June press conference that lower-than-expected second-round effects drove these diminishing inflationary pressures. As second-round effects appear prominently in the services sector, respective subcategories might be a good focus point potentially informing further SNB action. Specifically, Jordan mentioned tourism services in this context.
• Analyst views on the release remain sparse. Nomura have noted in their review of the June meeting that they are expecting even lower second-round effects than the SNB - that might have been a driver behind their lower-than-consensus estimate for this month's inflation round.

MNI, SECO, Bloomberg