RPT--🇨🇭❗️Cable FX Macro Weekly Note: Switzerland November Consumer Prices

**As seen in Risk In The Week report 12/01/23, subscribe at cablefxm.co.uk/reports

Swiss October consumer prices rose 1.7% Y/y, this matched economists’ estimates. The core print came in at 1.5% Y/y, this was faster than the prior and above the median survey of 1.4%. In the month, goods prices stayed unchanged from the prior at 0.2% while services prices rebounded to 0.1% from -0.3%. Despite the upside surprise in core CPI, our inflation tracker shows Switzerland as the only G10 country to stand within its central bank price target. The fact that inflation has been rising within the mandate gave the central bank no further reasons to keep monetary policy tightening, the SNB left rates unchanged at 1.75% in September. The central bank expects inflation to slow down further next year and rise by 1.9%. Analysts at ING brought up a discussion on the SNB FX sales program and its desire to keep a strong franc as this has helped the central bank fulfill its price mandate. ING said that the SNB’s need to sell FX reserves will wane as inflation differentials to major trading partners narrow quickly, they expect EUR/CHF to trade at around 0.95 next year and added that the SNB could shift from a seller to a buyer if the exchange rate falls too sharply. Economists at UBS said that a relatively lower interest rate is reducing the franc's attractiveness, they expect the SNB to start cutting rates in 2H 2024 as inflation eases rapidly.