Switzerland’s 10-year government bond yield climbed above 0.37%, reaching its highest level in more than three weeks, as renewed geopolitical tensions and rising oil prices stoked inflation worries. Crude prices jumped after the United States and Iran exchanged airstrikes following attacks on vessels near the Strait of Hormuz, heightening concerns over potential supply disruptions. Washington also revoked a 60-day waiver that had allowed Iran to sell crude, while US President Trump declared that, from his perspective, the ceasefire was over, further undermining hopes for a durable agreement.
Against this backdrop, the Swiss National Bank kept its policy rate unchanged at 0% and reiterated its readiness to intervene in foreign exchange markets to curb excessive appreciation of the Swiss franc and limit imported inflation. Swiss consumer price inflation slowed to 0.5% in June, marking its first deceleration in eight months. The figure remained within the SNB’s target range; the central bank still expects inflation to gradually firm over the year, projecting an average rate of 0.6% in 2026.
