Insights 
VT 
In April, Switzerland saw a 0.1% increase in producer and import prices, maintaining the same monthly growth rate as before. Producer prices alone rose by 0.2%, while import prices remained unchanged.
When compared to April of the previous year, the overall index experienced a 0.5% decrease. This decline is mainly driven by a 1.8% drop in import prices.
Stability In Factory Gate Inflation
This data shows the relatively stable nature of factory gate inflation in Switzerland. While producer prices edged higher for the second month in a row, it is the flat reading in imported goods that stands out against the broader downward pull over the past 12 months. What we’re seeing is a cost environment that’s not entirely deflationary, yet does not suggest broad upward pressure either—not at the headline level.
The year-on-year decrease in the total index reflects how import pricing continues to soften. A 1.8% decline is not small enough to ignore, nor strong enough to indicate collapsing demand. It’s more reflective of subdued external pressures, perhaps owing to currency effects or simply tepid demand for foreign goods. After all, Swiss manufacturing draws heavily from imported materials, so this change in cost structures should feed through to pricing decisions with only a modest lag.
For those of us tracking short-dated pricing activity, this adds an important piece to the puzzle. It supports the view that external inflation pressures are receding at a steady pace rather than falling off a cliff. Derivative exposures tied to producer or input costs should price in ongoing disinflation across imported components, particularly over the summer. This framework aligns with what Müller mentioned last week about controlled raw material flows and cautious inventory building across machinery and chemical production.
What’s not directly visible from the headline numbers, but relevant nonetheless, is the separation between domestic inputs and global sourcing. We can infer from the 0.2% uptick in locally produced goods that pricing power is not entirely absent within the country. However, this gain has not yet overwhelmed the broader softness from abroad—which matters.
Strategies For Short Tenor Cost Spreads
Given this split, short-tenor strategies on cost spreads may benefit from weighing more heavily on domestic demand recovery options. Pricing biases over June and July may lean mildly upward for local producers, but with foreign input costs remaining soft, spreads could stay favourable over the near term. This could also provide a slight lift to hedged instruments tied to finished good margins.
Expectations for sustained producer price inflation look overstated at this point, particularly if import prices repeat another month at or below current levels. We should model for steady inputs, with downside adjustment risk towards autumn should energy or shipping see unexpected movements.
In practice, the differential between local cost rises and static foreign input values is narrowing to ranges that don’t command premium risk adjustments. That means a tighter focus on sector routing, particularly across industrial firms with global exposure, would make sense. The signals now support short-term positioning that leans defensive against headline volatility, while still framing for targeted long bias in Swiss-manufactured exposure. That’s especially true for firms less dependent on volatile commodity imports.
As always, we remain aware of base effect rotation. Last year’s imported pricing surge only began to retreat late in spring, which will distort May’s annual print in the other direction. That creates a high potential for optical tightening in year-on-year comparisons, though the net process underneath should remain benign.
We continue to prefer instrument structures that offer defined downside buffers while exploiting this mild firmness in domestic production values. One-month forward positions still benefit from the gap that’s opened between real input softness and manufacturers’ measured pass-through.
