Swiss stocks initiated a significant trading week positively, with the Swiss Market Index showing an increase of 1.25% at Monday's close. This upward trend reflects a responsive market amid external economic pressures. In the context of international trade, the US government has decided to impose a 25% tariff on imports from Canada and Mexico, effective Tuesday.
This decision, which is still contingent upon further details to be clarified by US President Donald Trump, has been reported by several media outlets. Additionally, a new tariff of 10% on Chinese imports is also anticipated to be implemented soon, further complicating the global trade landscape. In the euro area, the situation appears to be slightly different.
Eurostat's flash estimates indicate that the annual inflation rate decreased to 2.4% in February, down from 2.5% in January. Concurrently, the annual core inflation rate also saw a reduction, declining to 2.6% from 2.7%. These figures are notably above market forecasts, suggesting persistent inflationary pressures.
"We expect that over the course of the year, the eurozone will begin to recover from its stagnation, boosted by slight improvements in domestic demand resulting from increased purchasing power and lower interest rates. This scenario is likely to maintain inflation levels a bit above the 2% mark. However, we must note that geopolitical events are creating significant uncertainty regarding inflation projections," stated experts from ING.
"For the European Central Bank, the major consideration is to what extent they will lower rates. We project another 0.25ppt reduction could be announced later this week, sparking a vigorous discussion regarding the ECB's terminal rate." Back in Switzerland, local economic indicators showed positive signs, with the manufacturing PMI rising to 49.6 in February from the previous January figure of 47.5.
Although still below the crucial growth threshold of 50 points, this increase reflects better-than-expected performance, as analysts had forecasted 48 points for the month. In the corporate arena, the Swiss National Bank reported substantial earnings results. The central bank recorded a net profit of 15.94 billion francs for the full year of 2024, a remarkable recovery from a loss of 53.21 billion francs the previous year.
Following the announcement, the stock rose by 0.56% at closing. In other significant corporate news, Swiss pharmaceutical giant Roche announced successful outcomes from its late-stage OutMatch study concerning the Xolair drug. This study demonstrated that Xolair outperformed multi-allergen oral immunotherapy in effectiveness during the trial's second and third phases.
Xolair holds the distinction of being the only FDA-approved medication intended to diminish allergic reactions for individuals, both children and adults, with at least one food allergy. Following this news, Roche's shares experienced a rise of 1.14% at closing. Overall, Swiss markets are reacting with optimism amidst changes in trade policies and shifting inflation dynamics, signaling a potentially transformative week for investors and consumers alike..