SWITZERLAND DATA: August CPI Remains Unchanged; SNB September Cut Unlikely
Swiss CPI inflation printed unchanged and in line with consensus at 0.2% Y/Y in August, with -0.1% M/M a tenth below consensus. Core CPI meanwhile decelerated to 0.7% Y/Y (vs 0.8% cons and prior).
- This means average Q3 to date inflation continues to stand marginally above the 0.1% forecast given by the SNB in its June meeting. Continued positive prints in Swiss inflation should skew near term policy expectations away from further easing into negative rates territory. The September meeting, priced at implied odds of around 10% of a cut, should remain out of play given today's data.
- Looking at the main categories, services inflation accelerated marginally despite a noticeable housing rental decrease on the category's quarterly update. Imported inflation meanwhile moved higher, meanwhile:
- Domestic 0.6% vs 0.7% prior
- Imported -1.3% vs -1.9% prior
- Services 1.2% vs 1.1% prior
- Goods -1.6% vs -1.6% prior
- Energy and fuels -7.7% vs -8.1% prior
- Housing rental 1.9% vs 2.6% prior
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EUROSTOXX50 TECHS: (U5) Through Bear Trigger
- RES 4: 5575.00 High Mar 3 and a major resistance (cont)
- RES 3: 5526.00 High Mar 19 / 20 (cont)
- RES 2: 5486.00/88.00 High May 20 and a bull trigger / High Jul 10
- RES 1: 5344.79/5449.00 50-day EMA / High Jul 27
- PRICE: 5279.00 @ 07:31 BST Aug 4
- SUP 1: 5173.01 3.0% 10-dma envelope
- SUP 1: 5166.00 Low Aug 1
- SUP 3: 5138.00 High Apr 30
- SUP 4: 5078.00 Low Apr 30
The trend condition in Eurostoxx 50 futures faltered Friday, with short-term weakness resulting in a break of the bear trigger. Having shown below 5194.00, the Jun 23 low, the April 30 hi/lo range at 5078-5138 becomes the area of downside interest. For bulls, a resumption of gains would refocus attention on 5486.00, the May 20 high. It has recently been pierced, a clear breach of it would resume the bull cycle.
BTP TECHS: (U5) Resistance Remains Exposed
- RES 4: 122.35 2.500 proj of the May 14 - 20 - 21 price swing
- RES 3: 122.00 Round number resistance
- RES 2: 121.73 High Jun 13 and the bull trigger
- RES 1: 121.62 High Aug 4
- PRICE: 121.43 @ 07:30 BST Aug 4
- SUP 1: 119.59 Low Jul 25 and key short-term support
- SUP 2: 119.48 Low May 26
- SUP 3: 118.87 Low May 21
- SUP 4: 118.51 Low May 14 and key support
The primary trend condition in BTP futures is unchanged, it remains bullish and recent weakness appears to have been corrective. A doji candle on Jul 25 highlights a potential bullish reversal. A continuation higher would open 121.73, the Jul 13 high and a bull trigger. Clearance of this latter level would confirm a resumption of the uptrend. Key short-term support has been defined at 119.59, the Jul 25 low.
GILT TECHS: (U5) Bull Cycle Accelerates
- RES 4: 93.13 76.4% retracement of the Jul 1 - 18 bear leg
- RES 3: 93.00 Round number resistance
- RES 2: 92.83 1.0% 10-dma envelope
- RES 1: 92.77/79 Intraday high/High Jul 4
- PRICE: 92.68 @ Close Aug 4
- SUP 1: 91.86 20-day EMA
- SUP 2: 91.44/08 Intraday low / 18 and the bear trigger
- SUP 3: 90.97 76.4% retracement of the May 22 - Jul 1 bull leg
- SUP 4: 90.59 Low May 29
Gilt futures traded higher again Monday, building on the gains posted through Friday’s sharp rally. This marks an acceleration of the current bull cycle - with prices breaching resistance at 92.15, the Jul 22 high as well as 92.74, the 61.8% retracement of the Jul 1 - 18 bear leg. The 76.4% retracement is at 93.13. On the downside, key support and the bear trigger has been defined at 91.08, the Jul 18 low.
