On a positive note, Swiss equities continued their upward trajectory on Tuesday, with the Swiss Market Index registering a robust increase of 1.19%. Investors are carefully analyzing the most recent inflation data, both locally in Switzerland and across the eurozone. According to government data, Switzerland’s annual inflation rate saw a slight dip to 0.6% in December 2024, down from 0.7% in the prior month.
This latest figure aligns closely with market expectations, indicating stability in the Swiss economy. Conversely, in the euro area, Eurostat’s preliminary results indicated that the annual inflation rate climbed to 2.4% in December 2024, an increase from the 2.2% reported in the previous month. Monthly consumer prices exhibited a mild rise of 0.4%, reflecting ongoing inflationary pressures. In a recent assessment, ING noted, "While we anticipate a slowdown in wage growth during the latter half of the year due to a softening labor market, we expect services price inflation to remain elevated, exceeding 3.5% in the first half of the year.
This situation suggests a significant possibility of further increases in eurozone inflation rates during the first quarter. Nevertheless, we believe the European Central Bank (ECB) will persist in its strategy of cutting interest rates, albeit at a measured pace." Turning to the employment sector, the euro area reported a seasonally adjusted unemployment rate of 6.3% for November 2024, unchanged from the previous month and a decrease from the 6.5% recorded a year ago. Focusing on corporate developments, Baader Helvea has revised its price target for Leonteq ($LEON) downward to 60.8 francs from 70.8 francs following a financial update from the technology firm in December 2024.
This adjustment largely reflects the repercussions of a profit disgorgement amounting to 9.3 million francs mandated by the Swiss financial market regulator, FINMA, alongside tempered growth projections within the structured products domain. Consequently, Leonteq's stock experienced a decline of 0.95% at market close. Conversely, Julius Baer Group ($BAER) observed a rise of 1.15% after finalizing plans to divest its wealth management operations in Brazil to Banco BTG Pactual for a transaction valued at 615 million Brazilian reais.
This deal is not expected to impact the Swiss private banking and wealth management group’s broader international business in Brazil, with completion anticipated in the first quarter of the coming year. Overall, developments in both inflation data and corporate news have created a stimulating atmosphere for investors, as they navigate through the evolving financial landscape in Switzerland and the broader eurozone..