Swiss CPI decreased by 0.1% in November 2024 compared to the previous month to 106.9 points (December 2020 = 100). Inflation was +0.7% compared to the same month of the previous year. These are the results of the Federal Statistical Office (FSO). The decrease of 0.1% compared to the previous month is due to several factors including lower hotel prices and comprehensive international holidays.
Prices for new cars and fruit vegetables have also fallen. In contrast, housing rents recorded an increase in prices, as did air transport.
The Swiss franc rose slightly on Tuesday. In the European session, the USD/CHF pair is trading at 0.8846, down 0.21% on the day.
The inflation report comes one week before the Swiss National Bank meeting on December 12. Markets set a significant cut of 50 basis points at 71%, and 25 basis points at 29%. Today’s inflation report indicates that risks are now on the lower side and that the central bank is concerned about inflation moving to the lower band of the 0% to 2% target range.
The central bank has been aggressive in its easing cycle, cutting interest rates by 25 basis points three times this year.
The Fed meets on December 18, its last meeting of the year. The Fed cut interest rates by 25 basis points last month and is expected to do the same at its December meeting. Federal Reserve Governor Christopher Waller said on Monday he was leaning towards cutting interest rates in December but his decision could change if inflation surprises markets. The US releases the November Consumer Price Index one week before the release of interest rates and the release will be a key factor in whether the Fed cuts or maintains interest rates.
What trends or patterns have you observed in the Swiss CPI Monthly over the past year?
Some general trends and patterns that are often observed in the consumer price index in Swiss francs per month over the past year based on the historical context:
Inflationary pressures: Many countries, including Switzerland, have experienced varying levels of inflation. The monthly CHF CPI could show upward trends if inflationary pressures from global supply chain issues and rising energy prices persist.
Volatility: Monthly CPI readings can show volatility due to seasonal factors, changes in consumer demand, and external shocks (e.g., geopolitical tensions or economic policies). Observing highs or lows in certain months may indicate these effects.
Basic CPI vs. Headline CPI: The distinction between the core CPI (excluding volatile items such as food and energy) and the CPI can reveal fundamental trends. If the core CPI remains stable while the CPI fluctuates, it may indicate that certain sectors are driving price changes.
Comparative stability: Historically, Switzerland has maintained relatively stable inflation rates compared to other countries. The CHF CPI may reflect on a monthly basis a consistent pattern of modest monthly changes, suggesting an effective monetary policy from the Swiss National Bank.
Responding to economic events: The CPI may show patterns in response to key economic events, such as changes in interest rates or fiscal policies, that can affect consumer behavior and prices.
Impact of the Swiss franc: A strong or weak Swiss franc against other currencies can affect import prices, thus affecting the consumer price index. Observations may show how currency fluctuations relate to CPI changes.
To get an accurate picture of CHF CPI trends on a monthly basis over the past year, one will need to analyze specific monthly data releases and look for patterns or marked shifts in inflation rates.
What external factors can influence the Swiss Consumer Price Index Monthly?
There are several external factors that can affect monthly CHF CPI readings:
Global commodity prices: Fluctuations in commodity prices, such as oil, food and metals, can directly affect the cost of goods and services in Switzerland, affecting the consumer price index.
Exchange rates: Changes in the value of the Swiss franc against other currencies can affect import prices. A stronger franc makes imports cheaper, which could lower the CPI, while a weaker franc could increase costs.
Economic conditions in trading partners: Economic performance in key trading partners, especially within the EU, can affect demand for Swiss exports, affecting domestic prices and inflation.
Monetary policy in other countries: Interest rate decisions and monetary policies from major central banks (such as the European Central Bank or the Federal Reserve) can affect capital flows and exchange rates, thus affecting inflation in Switzerland.
Supply chain disruptions: Events such as natural disasters, epidemics, or logistical issues can lead to shortages or an increase in commodity costs, directly affecting the CPI.
Consumer demand trends: Changes in consumer preferences or spending habits, often influenced by broader economic conditions, can affect demand for certain goods and services, affecting their prices.
Government policies: Fiscal policies, such as taxes, subsidies or regulations, can affect production costs and consumer prices, and thus affect the consumer price index.
Labor market conditions: Changes in wage levels and employment rates can affect disposable income and consumer spending, affecting demand and prices.
By carefully monitoring these external factors, analysts can gain insights into potential movements in the CHF CPI on a monthly basis and overall inflation trends in Switzerland.
