Swiss inflation has fallen again, increasing the possibility of the Swiss National Bank implementing negative interest rates. Switzerland's October Consumer Price Index (CPI) decreased by 0.1% on a monthly basis, with a year-on-year growth rate dropping to 0.6%, below the Swiss National Bank's expectation of 1.0% average inflation for the fourth quarter. After the news was released, the Swiss franc depreciated against all G10 currencies.

Deutsche Bank forex analyst George Saravelos stated: "Swiss inflation data further fell into deflation territory, and we believe the possibility of negative interest rates is rising again." The Swiss National Bank's next decision will be held on December 12 at 16:30 Beijing time.

The recent decline in Swiss inflation is mainly driven by the recent global oil price drop leading to lower fuel prices.

The core inflation that the Swiss National Bank is monitoring has decreased by 0.2 percentage points to 0.8%, with privately held service inflation excluding rents continuing to decline significantly.

The decline of the Swiss franc reflects the market's expectations for the Swiss National Bank's policy meeting on December 12 and the anticipation of further rate cuts in the future.

European economist Adrian Prettejohn stated: "Swiss overall inflation and core inflation are once again significantly below expectations, increasing concerns in the market that Switzerland may temporarily enter deflation next year. This will increase pressure on the Swiss National Bank to take decisive measures and raise the probability of a 50 basis points rate cut at the December meeting."

Saravelos pointed out: "The current nominal Swiss National Bank policy rate is already very low at 1.0%, further reducing it to maintain positive territory is limited."

USD/CHF daily chart

At 10:25 on November 4th Beijing time, the USD to Swiss Franc is at 0.8653/56.