• Prior +0.1%
• Core CPI +0.4% y/y
• Prior +0.4%

Even with the surge in energy prices, the impact on Swiss price pressures is less profound that what we saw with the Eurozone. Even the monthly estimate was +0.2%, missing on expectations of +0.5%. As such, the jump in headline annual inflation was also less than expected.

This reaffirms that even with energy prices surging higher, Swiss inflation dynamics is one that may not see too great of any direct impact. And when you add a counterbalance in the form of a stronger currency, that makes it very tough for the SNB to try and work things out. That especially if they cannot get markets to shake off the need of wanting to pile into the franc.

For now, core prices remain unaffected and that is well expected with the big impact being on energy prices. But given time to become more embedded into the economy, it will start to show up in other sectors too.

But again for the SNB, the case in point remains that they need to find a balance here in managing all of this amid fears that deflationary pressures will start to return more strongly in the medium-term.