Today, we’re focusing on the Swiss Consumer Price Index (CPI) report, which is expected to show a 0.1% increase year-on-year. This result is not likely to change how the Swiss National Bank (SNB) operates, as they are not planning to adjust rates unless there are consistent changes in the data. The Swiss Manufacturing Purchasing Managers’ Index (PMI) reached its highest level in two years recently. However, we may see future figures affected by potential increases in US tariffs.

Key Market Developments

We don’t anticipate any major market news unless something unexpected happens. This week, all eyes will be on comments from the Federal Reserve, along with the US ISM Services PMI and US Jobless Claims data. This morning, the Swiss CPI for July was announced at 0.2% year-over-year, which aligns closely with expectations. This low inflation supports our view that the Swiss National Bank will maintain current rates, which were last cut in March and June of 2024. Therefore, we expect minimal fluctuations in the franc, making short-volatility strategies on USD/CHF options attractive in the short term. With Swiss data providing little guidance, we’ll shift our focus to the United States this week. We’re looking for hints from Fed officials about their future plans, especially since they decided to keep rates steady during the July 2025 meeting. The market anticipates continued high rates, so any signals suggesting a softer approach could lead to big movements in equity and bond markets.

Upcoming US Economic Indicators

The US ISM Services PMI, which will be released later this week, is an important event to monitor. Last month, in July 2025, it had a solid reading of 53.5. However, forecasts suggest a slight decrease to 53.0, indicating the service sector may be slowing down. If the number drops below 52, it could indicate a quicker slowdown, prompting traders to buy put options on the S&P 500 as protection against recession concerns. We will also keep a close eye on the weekly US Jobless Claims data. Claims have stabilized around 220,000 for the last few months, showing a tight labor market. However, if claims unexpectedly rise above 235,000, it could alarm the markets and increase demand for VIX futures as traders prepare for more volatility. Create your live VT Markets account and start trading now.

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