Today, the main event is the Swiss Consumer Price Index (CPI) report, anticipated at 0.1% year-on-year. The outcome is unlikely to affect the Swiss National Bank’s decisions as it neither intends to cut nor hike rates unless consistent deviations occur.
The Swiss Manufacturing Purchasing Managers’ Index (PMI) previously reached its highest point in two years. However, potential impacts from increased US tariffs might influence future figures.
Key Market Developments
No other key market developments are expected unless unforeseen events arise. The week’s attention will be on comments from the Federal Reserve, alongside the US ISM Services PMI and US Jobless Claims data.
The Swiss CPI for July was released this morning at 0.2% year-over-year, which is very close to expectations. This low inflation confirms our view that the Swiss National Bank is firmly on hold, having last cut rates back in March and June of 2024. Consequently, we expect low volatility in the franc, making short-volatility strategies on USD/CHF options look appealing for the near term.
With Swiss data offering little direction, our focus this week shifts entirely to the United States. We are watching for any hints from Fed officials about their future plans, especially after they held rates steady at the July 2025 meeting. The market is priced for continued high rates, so any dovish language could cause a significant reaction in equity and bond derivatives.
Upcoming US Economic Indicators
The US ISM Services PMI, due later this week, is a key event to watch. Last month’s reading in July 2025 was a solid 53.5, but consensus is for a slight dip to 53.0, suggesting the strong service economy might be cooling. A number below 52 could signal a faster slowdown, likely prompting traders to buy put options on the S&P 500 as a hedge against recession fears.
We will also be closely monitoring the weekly US Jobless Claims data. Claims have been hovering in a low range around 220,000 for the past couple of months, indicating a still-tight labor market. Any unexpected jump above 235,000 could spook markets and increase demand for VIX futures as traders brace for higher volatility.
