Swiss 10-Year Yield at Over 3-Week High

Switzerland’s 10-year government bond yield rose above 0.37%, rising to over a three-week high, as renewed geopolitical tensions and higher oil prices fuelled inflation concerns. Oil surged after the US and Iran exchanged airstrikes following vessel attacks near the Strait of Hormuz, raising fears of supply disruptions. The US revoked the 60-day waiver that allowed Iran to sell crude and US President Trump stated that, as far as he is concerned, the ceasefire is over, reducing hopes for a lasting agreement. Meanwhile, the Swiss National Bank left its policy rate unchanged at 0% and reiterated its willingness to intervene in foreign exchange markets to limit excessive franc appreciation and contain imported inflation. Swiss inflation eased to 0.5% in June, the first slowdown in eight months. The reading came within the SNB’s target range, who expect inflation to gradually pick up over the course of the year, averaging 0.6% in 2026.

Switzerland's 10-year government bond yield edged up to 0.34%, tracking the global rise in borrowing costs after another increase in oil prices reignited inflation concerns. Oil prices climbed following reports of attacks on vessels near the Strait of Hormuz, highlighting ongoing geopolitical risks in the Middle East and raising fears of potential disruptions to global energy supplies. At its last meeting, the Swiss National Bank kept its policy rate at 0%, stating that it would rely on foreign exchange interventions to curb excessive franc appreciation if necessary. Inflation eased in June for the first time in eight months to 0.5%, remaining within the SNB's 0–2% target range. The International Monetary Fund urged the central bank to remain ready to adjust interest rates if needed, staying cautious of a stagflation scenario. The SNB expects inflation to pick up later this year, remaining stable over the medium term, while the government revised its 2026 growth forecast down to 0.9%.

Switzerland's 10-year bond yield rose to 0.33% at the start of July as easing geopolitical tensions improved risk appetite and reduced demand for safe-haven assets despite lingering uncertainty over a lasting agreement. Meanwhile, Swiss inflation slowed in June for the first time in eight months to 0.5%, remaining within the Swiss National Bank's 0-2% target range. The SNB kept interest rates at 0%, preferring to rely on currency interventions to curb excessive franc appreciation and pushing inflation too low through cheaper imports. The International Monetary Fund urged the SNB to remain ready to raise rates or cut them into negative territory if a stagflation scenario occurs, while the central bank reiterated its willingness to intervene in currency markets. Policymakers expect inflation to pick up modestly later this year but remain stable over the medium term, as energy supply disruptions ease, while the government trimmed its own 2026 domestic growth forecast to 0.9%.