Swiss Franc: Inflation data and SNB stance – Commerzbank

Commerzbank analysts Michael Pfister and Norman Liebke preview Swiss inflation for May, expecting headline at 0.6% versus consensus 0.7% and core at 0.3%. They stress that recent Gross Domestic Product (GDP) data support this benign outlook. With Swiss National Bank (SNB) President Schlegel reiterating readiness to intervene but seeing price stability maintained, They anticipate unchanged policy rates and limited Swiss Franc movement in coming months.

Soft inflation and steady SNB policy

"Swiss inflation figures for May are due to be released tomorrow. These figures will likely provide further insight into the extent to which the energy price shock is affecting the Swiss economy. The consensus forecast compiled by Bloomberg predicts headline inflation of 0.7% and a core rate of 0.3%. "

"Our nowcast model largely agrees with the consensus, predicting headline inflation just slightly lower at 0.6%. This is consistent with Monday’s GDP data, which differed by just 0.1 percentage points from the Bloomberg consensus."

"SNB President Schlegel has little new information to report either. His latest comments essentially reiterate the familiar message that the SNB is increasingly ready to intervene in the foreign exchange market."

"Despite Schlegel viewing the uncertainty caused by rising energy prices as greater, the SNB still considers price stability to be maintained."

"We therefore continue to expect the SNB to leave its key interest rate unchanged in the coming months, meaning no significant franc movement is likely to result from this policy."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)