The Swiss stock market opened the trading week on a positive note, as investors prepare for the pivotal monetary policy rate decision from the Swiss National Bank (SNBN.SW) scheduled for this week. On Monday, the Swiss Market Index saw an increase of 0.26%, reflecting a buoyant sentiment despite a relatively quiet day regarding local economic news.
The upcoming decision from the Swiss National Bank, set to be announced on Thursday, is highly anticipated. Analysts expect the central bank to implement a third consecutive easing of its monetary policy, which would likely result in a 25 basis points reduction of its key rates, bringing them down to 1%.
Commenting on the situation, financial analysts expressed that "there is an unusual degree of uncertainty around this meeting with the Swiss OIS market pricing in the chance for a 50bps cut. We look for a 25bps rate but more forceful warning that the SNB is prepared to act to prevent further CHF strength.
We look for a cumulative 75bps of easing into Q1 2025 to take the policy rate to 0.5%." In contrast, the latest figures from the HCOB Flash Eurozone Composite PMI Output Index revealed a concerning downward trend, falling to an eight-month low of 48.9 in September, down from 51 in August. This decline marks growing concerns over overall business activity within the eurozone, which has been primarily influenced by a "deepening downturn" in the manufacturing sector.
The manufacturing PMI index also reflected this downturn, declining to a nine-month low of 44.8 from 45.8, while the services PMI business activity index fell to a seven-month low of 50.5, diminishing from the previous figure of 52.9. In corporate developments, Galderma ($GALD) experienced a minor increase of 0.68%, subsequent to Berenberg's decision to reaffirm its buy rating on the Swiss pharmaceutical company's stock, although adjusting its price target downward to 103.30 francs from a previous 104.40 francs.
This adjustment is primarily motivated by Berenberg's belief that Galderma stands to gain from various "multiple potential catalysts on the horizon," notably including the anticipated launch of its significant biologic product Nemluvio in 2025 and the potential completion of debt clearance by 2028. Moreover, emerging corporate news indicates that Swiss financial regulator Finma has initiated an investigation into the operational methods of Credit Suisse during the turbulent period leading up to its collapse in 2023, which led to its acquisition by UBS Group ($UBSG).
Reports suggest that Finma has tasked law firm Wenger Plattner with conducting interviews with current or former staff from both Credit Suisse and UBS in connection with this investigation. At the close of trading on Monday, UBS shares found an increase of 0.51%. This ongoing dialogue around monetary policy and corporate governance signals a complex landscape for investors navigating the Swiss markets..