RENEWABLES: German Wind Output Forecast Comparison

Consensus to tomorrow's print is a bit unevenly distributed, with 8 estimates for the median 0.2%, 5 estimates looking for a higher 0.3% print, only one analyst predicting 0.1% Y/Y, but two analysts looking for a low 0.0% print according to Bloomberg data.

• UBS sees 0.1% Y/Y, commenting "We expect our definition of core inflation (headline excluding energy and food) to fall by 0.3pp to 0.5% y/y, predominantly due to a 1pp drop in rents inflation (to 1.6% y/y) reflecting the pass-through of the March reference rate cut. Outside of core, we expect energy inflation to rise 0.6pp to -7.5% y/y, while food inflation is expected to go up 0.4pp to -0.2% y/y."

From a domestic perspective, we'd argue tomorrow's Swiss CPI print would need a significant surprise to meaningfully shift SNB expectations towards further easing. Meanwhile, unemployment rate data is unlikely to move the needle for the CHF.

Reuters reporting comments from Russian President Vladimir Putin’s wide-ranging press conference in Beijing. Putin confirms an invitation is "on the table" for President Donald Trump to visit Russia, but there are "no preparations" for such a trip at the moment.

• Putin said he is ready to meet Ukrainian President Volodymyr Zelenskyy, if the Ukrainian leader came to Moscow, but questioned the “sense” of a meeting: “If meeting with Zelenskyy is well prepared, then I am ready to meet. Let Zelenskyy come to Moscow and the meeting will happen.”
• Putin said Russia is ready "if necessary" to raise the level of its negotiators in talks with Ukraine, appearing to acknowledge European criticism of the junior negotiating team dispatched to talks with Kyiv in recent Istanbul talks.
• Putin said Russian forces are “advancing on all fronts in Ukraine,” and said Ukraine is not capable of conducting large-scale offensive operations. Interfax notes that Putin said Russia is fighting for “people's right to speak their native [Russian] language,” in Ukraine, rather than territory.
• Putin's comments may be designed to raise optimism that Moscow is actively working towards a peace deal with Ukraine ahead of a key summit of European leaders in Paris tomorrow that is aimed at finalising security assurances for Kyiv.
• Zelenskyy said in a statement that he told Euro counterparts in Copenhagen today that the Russian economy "is in bad shape: fuel and labor shortages, many industries in decline. Putin constantly humiliates before China as he tries to sell them as much raw material as possible. This is telling – sanctions are working."

Swiss August CPI is scheduled to be published tomorrow at 0730BST/0830CEST, with consensus for an unchanged 0.2% Y/Y and 0.0% M/M.

• An inline print would mean Swiss average Q3 inflation to date is 0.2%, marginally above the SNB's latest conditional inflation forecast for this quarter (0.1%), and would also represent the third consecutive month of the Y/Y measure coming in within the SNB's target range again (after having missed to the downside in May for the first time since March 2021).
• That means the bar for the September SNB meeting to become 'live' again is high. With implied odds of around 10% of a cut into negative territory, a material downward surprise in tomorrow's CPI release would be needed for a meaningful shift in expectations here.
• For the meetings further down the line, there is arguably more scope for Swiss CPI to slow enough to warrant a move into negative territory. However, it is worth recalling that Schlegel appeared quite cautious against further cuts at the last SNB meeting, flagging the challenges they would come with, and concluding that only a clear threat of inflation leaving the SNB's target range on a medium term would warrant such a move.
• If the inflation print were to come in well below expectations, focus should be in particular on services- and domestic inflation measures. These appear to be a key input in the SNB's assessment of medium-term inflationary pressures, and will thus filter into their judgement if inflation threatens to move out of the target range on a sustained basis. Services and domestic inflation continued to print positive throughout recent months (at 1.38% and 0.71%, respectively, in July). Housing inflation will also see its quarterly update (lastly at 2.6%).