Consumer prices matched expectations in November. A 0.1 percent monthly fall put the yearly inflation rate at at 0.7, just 0.1 percentage point versus October, itself a 6-month low.

The overall monthly drop reflected 0.1 percent decline in domestic prices and 0.4 percent fall in import prices. For the former, annual inflation eased from 1.8 percent to 1.7 percent and for the latter, increased from minus 3.1 percent to minus 2.3 percent.

Within the CPI basket, the main area of weakness food and non-alcoholic beverages where prices were down 1.1 percent versus October alongside alcoholic beverages (minus 0.9) and recreation and culture (minus 0.7). Declines here were sufficient to more than offset modest gains elsewhere. As a result, core prices showed no change at 0.0 on the month, lifting the annual underlying inflation rate by a tick to 0.9 percent.

Today's update leaves the Swiss RPI at minus 14 and trims the RPI-P to minus 10. Overall economic activity is falling slightly short of market expectations.

Having fallen to just 0.6 percent in October, the yearly inflation rate is seen edging only a tick firmer to 0.7 percent last month.

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.