Insights 
VT 
Switzerland’s Consumer Price Index (CPI) year-on-year fell to 0% in April, down from the previous 0.3%. This change indicates a stagnation in consumer price growth compared to the prior period.
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What we’re seeing with Switzerland’s annual CPI reaching a flat 0% in April, down from 0.3%, is perhaps more telling than it appears at first glance. We are no longer witnessing minor easing—this is now a full pause in price growth. A static CPI figure essentially says prices on a basket of goods and services haven’t increased at all from twelve months ago. That’s rare in the current global macro context and narrows the path forward for the Swiss National Bank.
From a rate expectations angle, this considerably reinforces the dovish tilt we picked up on earlier this year. The SNB was among the first to begin trimming rates in March, and this data only compounds the case for continued accommodation. Inflation is not only falling—by this print, it’s disappeared altogether. What’s possibly more revealing is that Switzerland is now far below the 2% target most major central banks aim for.
Positioning And Strategy
Traders operating in interest rate futures now likely have clearer room to price in deeper or sooner easing. Volatility around short-end contracts may continue to thin out as the directional view becomes firmer, particularly ahead of the SNB’s June meeting. That said, the tail risks are not removed entirely. External pressures—especially from the Fed and ECB—can still force revisions down the line. For now, though, the local backdrop tilts heavily towards a looser stance.
This clarity on the inflation front may also allow for cleaner positioning into SNB-dated instruments. That doesn’t mean directional trades become easier; it means the argument for holding duration strengthens while carry drifts lower. What we’ve observed is a narrowing of real rate differentials, which can reduce currency risk premiums and prompt recalibration in cross-border exposure calculations.
If CPI hovers near these levels for another month or two, there’s a high likelihood the SNB becomes increasingly comfortable ramping up cuts, possibly at a faster pace than had been priced in earlier this year. This opens up fresh scenarios in swaps and a number of short-term interest rate derivatives. Traders with exposure here should run scenarios assuming even more aggressive easing cycles through Q3—particularly given that core inflation is also stuck near the bottom end of the range.
Jordan’s team signalled flexibility in March, but now the data may push them to act with greater urgency. The Swiss Franc’s relative strength could act as another variable, particularly if neighbouring monetary authorities resist rate reductions. However, assuming domestic macro develops along the same path, it’s plausible to expect another easing round without needing headline risk to force their hand.
One caveat—we should continue monitoring external energy inputs and supply-side anomalies, as this month’s flat print may not fully capture smaller data distortions. April is often uneven. But with stable domestic demand and limited wage pressures, the risk of sudden upticks in inflation is low. That gives us space to place more deliberate weight on market-pricing models showing downward moves.
No response from the bond market would be unusual here. Should we see lower break-evens combined with firm bid tones on long-end issuance, particularly the 10-year point, it may imply expectations are beginning to settle into a lower-for-longer narrative specific to Switzerland. It’s the type of environment where curve steepeners lose appeal fast unless global factors aggressively nudge rate paths higher.
We’re also watching how implied vol in currency options adjusts. Any downward drift in CHF vols—both in FX and rates options—would suggest lesser currency protection is being sought, another tell of stable forward guidance, albeit unspoken.
In the coming sessions, it makes sense to test trading strategies that benefit from low realised inflation and further rate suppression, especially where convexity is inexpensive. Payers lose appeal, receivers regain value. Carry compression plays might also look more attractive in this context, especially where cross-currency spreads have yet to fully absorb the Swiss side of the move.
