Commerzbank’s Michael Pfister expects Swiss core inflation to remain unchanged in January, in line with Bloomberg consensus, as the core rate has been moving sideways for months. However, he highlights upside risks to the headline rate from a roughly 10 Dollar rise in Oil prices, which could quickly lift transport costs and offer some relief to the Swiss National Bank.

Oil-driven upside risk for Swiss CPI

"Tomorrow, we will receive the January inflation figures from Switzerland, and the Bloomberg consensus expects unchanged values compared to December."

"We agree with the consensus view on the core rate: not much happened in January that could give the core rate a new direction, although it has been trending sideways for many months anyway."

"However, we see a risk of an upside surprise for the headline rate: the oil price rose by roughly 10 USD in January, and rising oil prices usually have a quick effect on Swiss transport prices – a component which is currently making a significant negative contribution to the headline rate."

"Of course, transport prices are only one part of the inflation rate, and this effect could be offset by other components."

"Nevertheless, we believe that the risks for tomorrow's figures are skewed to the upside, which would certainly be a relief for the Swiss National Bank."

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