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Figure Heloc 
Prior 0.0%Core CPI +0.5% y/yPrior +0.4%Swiss inflation continues to hold rather flattish with there being no growth on the month-on-month reading as well. That continues to underscore a lack of any momentum in price pressures. The script has flipped on the SNB for quite a while now as the battle is now against deflation rather than inflation once again.For now though, core annual inflation keeping at around 0.5% is still allowing them some breathing room so as to avoid diving into the toolbox of special monetary policy weapons to deal with the situation. In particular, the Swiss central bank wants to avoid negative interest rates for as much as they can and for as long as they can get away with.And the latest inflation data above will just about help them stick to the status quo for now. It’s not a topic that I would want to get into now but there is a risk of China exporting deflation across the globe in the coming year. And if so, Switzerland will not be insulated from that impact. So, the SNB might be forced into another tough spot and one that might not be too within their control. Just some food for thought as we look to the year ahead.
This article was written by Justin Low at investinglive.com.
💡 DMK Insight
Swiss inflation’s stagnation signals a shift in the SNB’s approach, and here’s why that matters: With Core CPI holding at 0.0% and a year-on-year increase of just 0.5%, traders should be wary of how this impacts the Swiss franc and broader forex markets. The lack of month-on-month growth indicates that price pressures are not building, which could lead the Swiss National Bank (SNB) to adopt a more dovish stance in future monetary policy decisions. This is crucial for forex traders, especially those holding positions in EUR/CHF or USD/CHF, as any hints of rate cuts could weaken the franc further. But don’t overlook the potential for a contrarian play. If inflation remains subdued, the SNB might surprise the market by maintaining current rates longer than expected, which could strengthen the franc against other currencies. Keep an eye on the 0.5% Core CPI level as a critical threshold; a drop below this could trigger a bearish sentiment shift. Watch for upcoming economic data releases that might influence the SNB’s next moves, particularly any signs of economic recovery or shifts in consumer spending.
📮 Takeaway
Monitor the 0.5% Core CPI level closely; a drop could signal a bearish shift for the Swiss franc against major pairs.
