Inflation was unchanged in October. A 0.1 percent monthly increase in prices saw the yearly rate match September's 1.7 percent, itself a 3-month high but still short of the SNB's definition of price stability. The outcome was just on the firm side of the market consensus.

Domestic prices were flat on the month, nudging their yearly rate steady a tick firmer to 2.2 percent. Import prices climbed 0.3 percent, in line with September's gain but this was small enough to trim their annual rate from 0.5 percent to 0.4 percent.

Within the CPI, the main upward pressure on the monthly change came from clothing and footwear where a 1.7 percent spike added almost 0.1 percentage point. The only other increase of any size was in alcohol and tobacco (0.9 percent). On the downside, the only significant fall was in household goods and services (minus 0.7 percent). Most other categories posted only minor monthly changes. As a result, core prices (excluding unprocessed food and energy) rose 0.2 percent versus September, lifting the annual underlying rate from 1.3 percent to 1.5 percent. However, this remains well below the SNB's near-2 percent CPI target.

Despite the acceleration in the core rate, today's report should not unduly worry the SNB. The central bank continues to warn that interest rates may have to be hiked again but without a marked deterioration in inflation trends, the December announcement should see policy left on hold. To this end, the Swiss RPI now stands at minus 14 and the RPI-P at 6 meaning that limited underperformance by overall economic activity remains wholly attributable to the unexpected softness of prices.

Prices are seen edging 0.1 percent higher on the month, nudging the yearly inflation rate a tick firmer 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.