Consumer prices fell at their fastest place since September of last year, down 0.3 percent in October, and rose 0.1 percent from their levels a year ago. Core inflation which removes the price effects of fresh and seasonal products, energy and fuel, fell 0.2 percent from September and were 0.5 percent higher than their year-ago levels.

The main factors behind the pullback in prices were prices for international package tours and hotel stays. The former fell 6.2 percent month-on-month and were 0.3 percent higher than a year ago. Hotel stays were cheaper as well, falling 3.5 percent in October while rising 0.7 percent from a year ago.

Prices for goods fell 0.2 percent month-on-month and were 1.6 percent lower than October of last year. Durable goods were 0.4 percent cheaper than in September and 2.1 percent lower than a year ago, while non-durables fell 0.3 percent and 1.6 percent on a monthly and yearly basis, respectively.
Lower prices were also seen for services, which fell 0.3 percent on the month. From a year ago, however, prices were 1.1 percent higher.

Due to the persistent strength of the Swiss Franc, prices for imported goods fell 0.5 percent in October, their fourth consecutive decline. Year-on-year they were 1.3 percent lower, having now contracted for two years. Prices on domestic goods were 0.2 percent lower in October and 0.5 percent higher than a year ago.

There is still no sign of inflation emerging in Switzerland, and even if domestic prices move higher, the strong local currency will help keep overall prices in check. Clearly nothing here that will worry the Swiss National Bank.

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.