**As seen in Risk In The Week report 01/05/24, subscribe at cablefxm.co.uk/repots
Swiss consumer prices surprised economists in November as the headline slumped to 1.4% Y/y from the prior 1.7%, the consensus median had seen inflation unchanged at 1.7%. November Core CPI rose at 1.4% Y/y. Switzerland's inflation is now rising at the slowest pace since October 2021, the surprise in inflation data came ahead of the SNB holding its last quarterly monetary policy decision of the year. Last month, the Swiss central bank left policy unchanged at 1.75%, the consensus expected a 25bps rate hike. The SNB dropped its wording on possible future rate hikes and said that FX sales were no longer in focus. Having reached its price target the SNB is not pressured to keep a strong franc, we remind you that the CHF was the leader G10 currency last year.
The desk at MUFG noted that the latest batch of SNB’s inflation forecast showed a downgrade across the horizon, the central bank now sees 2024 prices rising by 1.9%. MUFG warned that another period of persistent disinflation will likely cause concern about too low inflation, something that has not been seen since before the pandemic hit in 2020.
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