Inflation accelerated in September for the first time since February. A surprise 0.1 percent monthly dip in prices was small enough to lift the annual rate of change from August's 1.6 percent to 1.7 percent, a 3-month high but still short of the SNB's definition of price stability.

Domestic prices fell 0.2 percent on the month, shaving their yearly rate from 2.2 percent to 2.1 percent. However, import prices climbed a further 0.3 percent to boost their annual rate from 0.3 percent to 0.5 percent.

Within the CPI, the main upward pressure on the monthly change came from petroleum products where a 3.0 percent spike added almost 0.1 percentage point. A largely seasonal 2.7 percent bounce in clothing and footwear also provided a boost. However, these effects were more than offset by declines elsewhere, notably restaurants and hotels (1.3 percent), food and soft drink (0.5 percent) and alcohol and tobacco (0.4 percent). As a result, core prices (excluding unprocessed food and energy) also decreased 0.1 percent versus August, reducing the annual underlying rate from 1.5 percent to just 1.3 percent. This matched its lowest mark since January 2022.

The SNB should be quite happy with today's data. Both headline and core inflation have been below 2 percent since June and underlying inflation has fallen every month since April. The Swiss RPI now stands at minus 9 and the RPI-P at 3, the latter showing real economic activity finally catching up with market expectations.

Prices are expected to be unchanged on the month, lifting the yearly inflation rate by 0.2 percentage points to 1.8 percent.

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.