Commodity Daily News

Important CPI Data due Today

Swiss CPI data highlights today's economic calendar. Consensus expectations are for a slight increase of 0.2% m/m, down from 0.3% in September. While the drop in CPI is minute, it is a positive when compared to the August (-0.3%) and July data (-0.8%). A strong CHF vs. the EUR is one reason for the deflationary pressures in Switzerland and the move by the SNB to place a floor at the rate of 1.20 for the EUR/CHF is to ward off the harmful effects of a deflationary environment. Rumors of additional moves by the SNB to move the floor to 1.25 are a weekly event but the SNB may be more conservative and not rock the boat given its success at keeping the EUR/CHF rate stable without expending too much of its reserves. This is unlike the Japanese and their unsuccessful attempts to weaken the JPY.


Looking at the price action, the EUR/CHF traded as low as 1.2130 this past week but the pair is back up to 1.2300. Its long term trend line off of the May 2010 high comes in at 1.2400. For the USD/CHF a cross of the 50-day moving average above the 200-day moving average will likely take place within the next few days, a bullish technical move. Initial resistance is found from the October 20th high of 0.9080 followed by the October high of 0.9310.