Swiss Inflation Slows Below SNB Forecast

Nomura strategists are forecasting that Swiss inflation will remain below the central bank's expectations in Q3. According to their data, Swiss Consumer Price Index (CPI) slowed to 0.4% year-on-year in July, primarily due to weaker car fuel prices and easing imported energy costs.

This marks a decrease from June's 0.5% year-over-year inflation rate. While core inflation remained steady at 0.3% year-over-year, the main surprise was a decline in transport prices, which fell 0.4% month-on-month compared to Nomura's expectation of a 0.6% rise.

The SNB has forecasted an average inflation rate of 0.7% for Q3, but Nomura now expects it to be 0.5%, 0.2 percentage points lower than the central bank's prediction. This implies a softer backdrop for the Swiss Franc (CHF).