Swiss inflation expected to decline further to -1.2% yoy in April

In May, the Swiss headline inflation rate is likely to decline further to -1.2% yoy, with energy prices weighing heavily on the yoy comparison despite continuing to rise on a mom comparison.

While base effects resulting fading from the yoy rates later this year and early next will counter the deflationary impacts from the stronger currency, inflationary pressures remain very subdued. This in turn will weigh on the SNB in coming months and may force them to renewed action if the weakness in growth and inflation goes too far.

For now, unchanged policy is expected, with positive impulses coming from the recovering euro area economy and German strength, while also weaker oil prices should boost growth, says Societe Generale.