Swiss July Headline Remains at 1.3%, Services Moderate

Swiss CPI inflation printed in line with consensus at 1.3% Y/Y in May (vs 1.3% cons and prior), and -0.2% M/M (vs -0.2% cons; 0.0% prior). Core CPI came in also in line with expectations at 1.1% Y/Y (vs 1.1% cons and prior) and -0.3% M/M.

• For the Y/Y headline rate, this marks the second consecutive unchanged print. The rate remains below SNB Q3 expectations of 1.5% Y/Y - some uptick might materialize amid the quarterly rental price update in August, however.
• Services inflation, which appears to be under elevated scrutiny by the SNB, moderated to 2.2% Y/Y (from 2.4% prior). That was partly due to package holidays falling from 6.0%Y/Y to 4.2%Y/Y, while airfares had a large negative contribution M/M, but in Y/Y terms the contribution was small.
• The print should not materially impact the likelihood of an SNB cut at its meeting in September compared to expectations - EURCHF moved only marginally on the release.