**As seen in Risk In The Week report 03/02/24, subscribe at cablefxm.co.uk/reports
Switzerland's January consumer prices missed estimates at 1.3% Y/y vs the median projection of 1.7%. The latest price data point solidifies the SNB's position in the G10 as it is the only central bank meeting its mandate. Also, January CPI widens the divergence between DM central banks and the SNB as the former is seen holding rates higher than previously anticipated while the market is fully pricing a March rate cut from the former.
Analysts at UBS noted that January inflation was 50bps lower than the central bank's projection of 1.8% in 1Q, and added that there is now a significant risk for a downward revision to the SNB's forecasts and a March rate cut. A key metric for UBS will be the inflation projection end-point which stood at 1.6% in December, they think it would need to be revised below 1.5% for the central bank to start cutting rates.
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