Switzerland’s May inflation data due shortly could reinforce the Swiss National Bank’s dovish trajectory, according to Commerzbank analysts Michael Pfister and Norman Liebke. The pair forecast headline inflation at 0.6% month-on-month, below the consensus estimate of 0.7%, with core inflation projected at just 0.3%. This softer outlook is underpinned by recent GDP figures showing subdued economic momentum in Switzerland.
The lower-than-expected inflation prints would strengthen the case for continued monetary easing by the SNB, potentially weighing on the Swiss franc against major currencies. Traders should watch for immediate franc weakness if the data comes in at or below Commerzbank’s forecasts, particularly against the euro and dollar. The timing is critical as global central banks navigate divergent policy paths, with Switzerland potentially maintaining a more accommodative stance than peers.
FXnCO Insight
Position for potential franc downside ahead of the release, with sub-consensus inflation data likely accelerating SNB easing expectations and creating near-term shorting opportunities in CHF crosses.
Source: FXStreet