Swiss 10-Year Yield Eases from 2-Month High

Switzerland's 10-year government bond yield fell below 0.50%, retreating from a more than two-month high as investors assessed tariffs disputes amid escalating geopolitical tensions. Oil prices continue to surge as the US-Iran conflict intensified, increasing the risk of energy supply disruptions at another key maritime chokepoint and fueling concerns over higher inflationary pressures, and slower economic growth. At the same time, the Trump administration imposed new tariffs on Swiss imports, while remaining within the previously established tariff ceilings of up to 12.5%. The Swiss National Bank kept its policy rate unchanged at 0% in June and reiterated its readiness to intervene in the foreign exchange market to prevent excessive franc appreciation. Meeting minutes also showed policymakers acknowledged higher near-term inflation risks, although the medium-term inflation outlook remained broadly unchanged.

Switzerland's 10-year government bond yield rose above 0.45%, further increasing to a near two-month high, as escalating tensions in the Middle East lifted inflation expectations. Oil prices surged amid intensifying hostilities between the US and Iran, raising energy costs and prompting markets to reassess the outlook for inflation, economic growth, and monetary policy. The Swiss National Bank left its key policy rate unchanged at 0% at its latest meeting, expecting inflation to remain little changed in the medium term. However, meeting minutes highlighted that policymakers see rising geopolitical tensions as a near-term inflation risk. The SNB also reiterated its willingness to intervene in the foreign exchange market to counter excessive franc appreciation and preserve price stability, while the IMF urged the central bank to remain cautious should a stagflation scenario emerge.

Switzerland's 10-year government bond yield rose above 0.40%, reaching its highest level in a month after touching a nearly four-month low of 0.25% on June 26th, as escalating geopolitical tensions heightened concerns over oil supply disruptions and inflation risks. US-Iran tensions persisted after Washington revoked the 60-day waiver allowing Iran to sell crude and ended the ceasefire. Meanwhile, President Donald Trump said the Strait of Hormuz remained open to commercial shipping, while Tehran claimed it had closed the waterway after intercepting two vessels it said were using an unauthorized route, adding to uncertainty over global energy supplies and boosting safe-haven demand. The Swiss National Bank left its policy rate unchanged at 0% and reiterated its willingness to intervene in foreign exchange markets to curb excessive franc appreciation. Swiss inflation eased to 0.5% in June, the first slowdown in eight months, with the SNB forecasting 0.6% inflation in 2026.