Inflation ticked higher in June, led by increased prices for package tours and hotel stays. Compared to May, overall consumer prices rose 0.2 percent after gaining 0.1 percent the previous month. The year-on-year comparison showed prices gaining 0.1 percent in June after falling 0.1 percent in May.

The measure excluding seasonal products, energy and fuel rose 0.1 percent in June and 0.6 percent from a year ago. Prices for imported goods were a mitigating factor in June, which were unchanged and down 1.9 percent from a year ago. Domestically, prices rose 0.2 percent in June and 0.7 percent from a year ago.

Rental costs were unchanged in June and up 2.6 percent on the year. Should prices remain moderate in the coming months, the reference interest rate for rental properties could be lower.

Today's numbers will not raise any red flags for the Swiss National Bank which could cut its policy rate again in September, moving it into negative territory. The strong Swiss franc is helping to keep prices in check as seen by the results for imported goods.

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.