🇨🇭Cable FX Macro Weekly Note: Switzerland Feb. Inflation Rate

**As seen in Risk In The Week report 03/31/23, subscribe at cablefxm.co.uk/reports

Swiss February headline inflation came in at 3.4% Y/y, this was faster than the prior 3.3% and above the median expectation of 3.1%. On the month, food prices eased to 1.1% from the prior 1.4%, clothing rebounded to 3.7% from the prior -6.4%. Housing and utilities prices slowed to 0.2% from the prior 1.8% M/m, transport prices rebounded to 1.4%. Economists expectations see Swiss prices peaking in February as the following reading is forecasted to slowdown, however, headline prices have beat the consensus so far in January and February. We recently heard from the SNB and received a fresh batch of projections, the central bank said to be concerned with second-round inflation effects, while growth is expected to remain modest for the rest of this year. The SNB now sees 2023 inflation at 2.6%, however, the forecast sees prices back within target by next year. SNB FX policy was reiterated where they do not defend the franc from appreciating anymore, it is interesting to see the divergence between EU and Swiss inflation dynamics and to what extent the EUR/CHF rate played a role here.