SWITZERLAND DATA: Feedthrough Questionable If Services CPI Comes Higher in April

Swiss April CPI is scheduled to be published Monday, May 5, 07:30 BST / 08:30 CEST, with consensus for the headline measure standing at 0.2% Y/Y (0.3% prior) and 0.2% M/M. 

• An inline headline print at 0.2% Y/Y would be the lowest since March 2021 - and would mean Swiss inflation starts off the quarter not far off the 0.3% Q2 average SNB inflation forecast.
• Core CPI consensus stands at 0.8% Y/Y (0.9% prior).
• Eurozone April core inflation notably surprised to the upside today, and national-level data released through this week pointed towards one-off Easter Effects (easter holidays were in April this year, as opposed to last year, filtering through to a higher Y/Y in travel-related services) having contributed towards this 'beat' - we would not be surprised if a similar trend will also be observable in Switzerland this time. Thus, in case of a higher services rate (March 1.58% Y/Y), focus should be on how much travel-related services (package holidays, airfares, hotels) were behind that.
• The SNB seems likely to look through a potential temporarily higher services Y/Y rate given their wariness of downside growth risks following US tariffs and subdued headline inflation in Switzerland. Thus, it remains questionable if a higher-than-expected CPI print in April would be able to materially shift market pricing for the next SNB meeting in June - a 25bp cut is fully priced as of now.
• UBS expects 0.1% Y/Y headline in April:
  • "A decline in energy prices (-1.7pp to -8.5% y/y) to be the key driver of the fall in headline"
  • "Food and our definition of core inflation (headline excl. energy and food) are also expected to decline -0.4pp to -0.6% y/y and -0.1pp to 0.9% y/y"
  • "Swiss inflation to hover around 0.1% y/y over the coming months with risks firmly skewed to the downside amid the recent sharp appreciation of the CHF."