CH: CPI

Consumer prices remained stable in March compared to a month ago after increasing 0.6 percent in February, as competing sectors balanced each other out. Package tours, a bellwether of discretionary spending, increased 6.4 percent from a month ago, while fuel and heating oil declined.

Compared to a year ago, prices increased 0.3 percent in March, matching the pace seen in February. Stripping out fresh and seasonal products, energy and fuel, prices were 0.1 percent higher on the month and 0.9 percent higher from March a year ago.

Both headline and core figures are unlikely to bother the Swiss National Bank very much. At its March meeting, the arbiters of monetary policy raised their annual inflation forecast to 0.4 percent from 0.3 percent, meaning today's results are well within expectations.

On Wednesday the US government announced sweeping global tariffs which will certainly increase price pressures, particularly on automobiles. In March, new cars were 0.2 percent higher in March from a month ago and 0.4 percent lower than the same time a year ago. This is something to keep an eye on in the coming months.

The consumer price index (CPI) is an average measure of the level of the prices of goods and services bought for the purpose of consumption by Swiss households. Monthly and annual changes in the CPI provide widely used measures of inflation. The policy target measure for the Swiss National Bank (SNB), the annual CPI rate can be distorted by swings in prices amongst the more volatile subsectors and the CPI excluding fresh food and energy is used as a better guide to underlying short-term trends. Although not a member of the Eurozone, a harmonized index of consumer prices (HICP), measured according to Eurostat's procedures, is also published alongside the CPI.

The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets- and your investments. Inflation (along with various risks) basically explains how interest rates are set on everything from loans to notes and bonds. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion. By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.