| Actual | Previous | |
| Month over Month | 0.3% | 0.2% |
| Year over Year | 0.6% | 0.3% |
Highlights
Consumer prices perked up in April increasing 0.3 percent month-on-month and 0.6 percent on the back of higher prices for petroleum, diesel fuel, and heating oil. In March, prices were up 0.2 percent on the month and 0.3 percent on the year.
Petrol rose 8.6 percent in April and stood 8.8 percent higher than a year ago, while diesel fuel increased 15.1 percent and 19.3 percent by the same measure. Heating oil prices rose 12.0 percent from a month ago and 35.5 percent year-on-year. With the conflict in the Middle East, these gains come as no big surprise.
The headline core rate of inflation which excludes energy and fuels along with seasonal foods was unchanged month-on-month while up 0.3 percent year-on-year. Consumer prices excluding petroleum products were unchanged on the month and up 0.2 percent year-on-year.
One additional notable price increase was for international air travel which saw a monthly gain of 7.0 percent and a 5.6 percent year-on-year increase. These were also no doubt affected by higher fuel prices.
Higher fuel prices were evident in the index for imported goods which posted a 1.5 percent gain in April while rising 0.9 percent year-on-year. Domestic inflation was more measured, having fallen 0.1 percent month-on month and rising 0.5 percent year-on-year.
While overall prices remain relatively subdued, higher fuel prices will certainly hurt and consumers will have to likely make choices on what they spend their money on. For now, the Swiss National Bank doesn't face the same dilemma as other central banks. In the Eurozone, inflation is already above the comfort level of the ECB.
Definition
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.
Description
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.