The yield on the Swiss 10-year government bond increased to approximately 0.26% amid escalating geopolitical tensions following President Trump's tariff threats linked to European countries' opposition to the US interest in acquiring Greenland. Trump has announced intentions to levy new tariffs on European nations, including key economies such as France, Germany, and the United Kingdom. These tariffs are poised to begin at 10% on February 1 and may reach 25% by June.
Investors are also closely watching the World Economic Forum in Davos, commencing on January 20, where key figures like Swiss National Bank Chairman Martin Schlegel will deliver remarks. The outlook is that the Swiss National Bank will likely sustain its 0% key interest rate in the near term, as indicated by the minutes from their December meeting, which highlighted no urgent need for policy alterations.
Additionally, inflation in Switzerland showed a slight increase, with the Consumer Price Index (CPI) rising by 0.1% year-on-year in December—marking the first uptick since July. Projections suggest a gradual rise in inflation over the coming months.
