Producer and import prices rose 0.1 percent in April, the same pace seen in March, while declining 0.5 percent from a year ago on the back of a 1.8 percent drop in import prices. Factory gate prices gained 0.2 percent on the month and were unchanged on a year-on-year comparison.

Excluding volatile items like agricultural items and petroleum products, prices were up 0.2 percent on the month and down 0.3 percent on the year.

In light of the tariff situation, import prices have come more into focus. For now, there have been offsetting price developments, with a 17.7 percent year-on-year increase agricultural prices offset by a 14.1 percent drop in the price of energy, tempered in the overall index by a 17.1 percent drop in petroleum prices.

For manufactured products, domestic sales were up 0.2 percent, and up 0.5 percent from a year ago. The cost of exported goods also rose 0.2 percent from March while falling 0.5 percent from a year ago.

For now, offsetting price developments have kept producer and import prices in check, but with continuing tariff uncertainty that could change.

The producer price and import price index focuses on the actual prices of products on the market (transaction price) at the time of the order. The prices of domestic products are taken at the producer or factory level, excluding value added tax and consumption taxes. For imports, prices are collected at the Swiss border, without the value added tax, taxes on consumption and tariffs. Changes in the index provide a guide to inflation from the point of view of the product's producer/manufacturer

The producer price and import price index measures prices at the producer level before they are passed along to consumers. Since the producer price index measures prices of consumer goods and capital equipment, a portion of the inflation at the producer level gets passed through to the consumer price index (CPI). By tracking price pressures in the pipeline, investors can anticipate inflationary consequences in coming months. Producer and import prices are more volatile than consumer prices. While the CPI is the price index with the most impact in setting interest rates, the producer price and import price index provides significant information earlier in the production process. The producer price and import price index is considered a precursor of both consumer price inflation and profits. If the prices paid to manufacturers increase, businesses are faced with either charging higher prices or they taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace. The bond market rallies when the producer price and import price index decreases or posts only small increases, but bond prices fall when the index posts larger-than-expected gains. The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.