RPT--🇨🇭Cable FX Macro Weekly Note: Switzerland August CPI

**As seen in Risk In The Week report 08/25/23, subscribe at cablefxm.co.uk/reports

Switzerland consumer prices rose by 1.6% Y/y in July, this was in line with the consensus forecast and slower than the prior 1.7%. Diverging from other developed markets, the core metric came in below expectations at 1.7% Y/y. Inflation fell by 0.1% M/m, this was the first monthly decline since December. As of July, consumer prices in Switzerland are the lowest in the developed markets and the SNB is the only central bank to have managed to reach their price target. The central bank predicts prices will rise above 2.0% by year-end but expects a slowdown to 1.5% by next year. Analysts at UBS see inflation rising in the short term before moving back to current levels by 1Q 2024. UBS expects the SNB to deliver one last 25bps policy move to reach a peak rate of 2.0%. As a reminder, the CPI downtrend has been supported by currency dynamics as the CHF holds the top performer ranking in 2023. A further easing in inflation may support a revision to the SNB forecast for a final rate hike.