FX.co ★ Swiss 10-Year Bond Yield at Over 2-Week High

The yield on the Swiss 10-year government bond continues to climb, nearing 0.18%, a peak not seen since October 31. This movement comes as the likelihood of interest rate cuts by the Swiss National Bank diminishes. Despite moderate inflation levels and initial signs of considerable economic impact from U.S. tariffs in the third quarter, it is anticipated that the central bank will maintain its policy rate at 0% during its December meeting, the final one for the year. In the third quarter, Switzerland experienced a GDP contraction of 0.5%, countering the 0.1% growth witnessed in the previous quarter. However, the recent easing of tariffs provides some relief from potential economic threats, with Swiss National Bank policymakers expressing optimism that inflation will gradually increase over the next few quarters. The central bank remains cautious about reducing rates below zero to avoid financial system instability. Concurrently, demand for safe-haven investments continues, though at reduced levels, as traders remain watchful for key U.S. economic data, which could affect the Federal Reserve's forthcoming policy decisions.